Iowa Revenue Director Courtney M. Kay-Decker has received a 2016 Outstanding Achievement in State Tax Reform award from the Tax Foundation.
Kay-Decker “led the effort to reform Iowa’s unclear manufacturing supplies sales tax exemption, gathering input to define precisely what it applies to, adopting administrative regulations, and then working with legislators to codify the change,” the Tax Foundation wrote.
The previous law required manufacturers to distinguish between a taxable supply part and a tax-exempt replacement part.
“In a nutshell,” Kay-Decker says, “it was labor intensive and burdensome for all manufacturers to make this distinction, but particularly for small manufacturers because they are less likely to have an accounting department to help them.”
“We look at rules to see if they continue to make sense in the world we live in,” continues Kay-Decker. “We realized that this manufacturing exemption, this particular part dealing with supplies, generated lots of questions and protests and made it very challenging for taxpayers.”
She and her team concluded that the supply distinction didn’t make sense anymore in today’s world, so they put together a rule basically saying a supply is the same as a replacement part.
Going forward, Kay-Decker says she and her team are always looking for options to simplify and reduce burdens. That’s in keeping with her department’s vision statement: “Iowa will be a state where it is easy to understand and comply with tax obligations.”