You are receiving this message as part of the Iowa Department of Revenue’s ongoing effort to educate businesses and organizations about the state’s new Water Service Excise Tax (WET). The Department has received many questions from taxpayers about who is subject to WET. Detailed information, including a webinar, about WET can be found on our website at https://tax.iowa.gov/WET.
Only “water utilities” are required to collect WET. For purposes of WET, a “water utility” is anyone providing water to the public through a piped distribution system for compensation. Simply owning a well or other water supply does not necessarily mean you are subject to WET. In addition, taxpayers who only sell water through interior plumbing, as opposed to also owning a well or water supply, are not required to collect WET.
For example, a restaurant may have an on-site well that pipes water into the restaurant. If the owner of the well is not charging the owner of the restaurant for the water service, then there is no sale of water service and the well owner does not have to collect WET. If the well owner charges the restaurant for the water service, then the sale is subject to WET and the well owner would collect WET from the restaurant owner.
We realize that changes in how taxes are structured and collected can be confusing. More information about WET can be found at
https://tax.iowa.gov/WET. You can also
email your question or call us at 515-281-3114 or 800-367-3388.
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