Section 701.17.8. Sales in interstate commerce—goods transported or shipped from this state.

When tangible personal property is sold within the state and it is transported to a point outside the state, or it is transferred to a common carrier, to the mails, or to parcel post for shipment to a point without the state, sales tax shall not apply, provided the property is not returned to a point within the state except solely in the course of interstate commerce or transportation. See 701—subrule 26.2(3) for a description of an exemption applicable to services performed on the above-described property on or after May 22, 1999.

Example:  Company A sells point-of-sale computer equipment. The company is located in Des Moines, Iowa. Company A enters into a contract with company B to sell the latter company a large number of point-of-sale computers. Company B is located in Little Rock, Arkansas. A transfers possession of the computers to a common carrier in Des Moines, Iowa, for shipment to B in Little Rock. Sale of the computers is exempt from Iowa sales tax.

       17.8(1) Proof of transportation. The most acceptable proof of transportation outside the state shall be:

        a.           A waybill or bill of lading made out to the retailer’s order calling for transport; or

        b.           An insurance or registry receipt issued by the United States postal department, or a post office department’s receipts; or

        c.           A trip sheet signed by the retailer’s transport agency which shows the signature and address of the person outside the state who received the transported goods.

       17.8(2) Certificate of out-of-state delivery. Iowa retailers making delivery and therefore sales out of state shall use a certificate in lieu of trip sheets. The certificate shall be completed at the time of sale, identifying the merchandise delivered and signed by the purchaser upon delivery.

       17.8(3) Exemption not applicable. Sales tax shall apply when tangible personal property is delivered in the state to the buyer or the buyer’s agent, even though the buyer may subsequently transport that property out of the state and, also, when tangible personal property is sold in Iowa to a carrier and then delivered by the purchasing carrier to a point outside of Iowa for the carrier’s use.

This rule is intended to implement Iowa Code section 422.45(46).