Iowa—Sales and Use Tax: Yoga Franchisee’s Not Subject to Sales and Use Tax

IA – For Iowa sales and use tax purposes, a yoga franchisee’s (taxpayer’s) classes were not subject to sales and use tax as the instruction charges qualified for the statutory exemption. In this matter, the taxpayer offered yoga classes to customers and petitioned for a declaratory order clarifying whether its services of yoga classes to customers were subject to sales tax. Upon review, it was noted that the taxpayer provided facilities for both taxable recreation and nontaxable instruction in a recreational activity.

However, the charges for instructions were not taxable because:

  • the instruction charges were separately contracted for;
  • instruction occurred under supervision and in a class setting; and
  • the instruction imparted learners with requisite knowledge and instructors were specially trained.

Accordingly, the taxpayer’s services satisfied the criteria for exemption given under the administrative rules.


About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

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