Don't pick on pumpkins

Monday, November 5, 2007

The Iowa Dept of Revenue & Finance has changed back and forth regarding whether pumpkins should be exempt from sales tax as a food item.

Iowa sales tax law exempts sales of food and food ingredients. Food and food ingredients are defined as substances that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.

Back in 2006, the Iowa Department of Revenue decided that pumpkins were not being purchased as a food item and announced in December of last year that such sales would no longer be exempt from sales tax.

Because many sellers forgot or were unaware of the change, many such sales were not taxed in 2007 and the state has backed off on trying to collect the tax. Those who have paid the tax can even apply for a refund.

Although most pumpkins sold intact, rather than as processed pie filling, are not eaten, the fact that people can and sometimes do prepare and consume pumpkins as food should qualify it as exempt from sales tax.

Numerous food items are used to create decorations, fed to animals or used in a variety of ways rather than being eaten by people. It would not be possible to determine at the point of sale what each food item's ultimate use will be.

If something is known to be commonly consumed as food, we need to keep it exempt from sales tax