701—211.51(423) Personal transportation service.
	211.51(1) Personal transportation service defined. “Personal transportation service” means the arrangement or provision of transportation of a person or persons for consideration, regardless of whether the person or entity providing such service supplies or uses a vehicle in conjunction with the service. “Personal transportation service” includes but is not limited to the following:
	a. 	Transportation services provided by a human driver, including but not limited to drivers with a Class C, Class D endorsement 3, or Class M license, or by a chauffeur as defined in Iowa Code section 321.1(8). Examples of such services include but are not limited to taxi services, driver services, limousine services, bus services, shuttle services, and rides for hire;
	b. 	Transportation services provided by a nonhuman driver, autonomous vehicle, or driverless vehicle; and
	c. 	Ride sharing services, including but not limited to use of a network to connect transportation network company riders to transportation network company drivers who provide prearranged rides as defined in Iowa Code section 321N.1(4).
Example 1: Marketplace X is a transportation network company that operates a network to connect drivers to riders. Driver D provides rides in Iowa exclusively through X’s network. A person in Iowa requests a ride through X’s network, and D provides the ride in D’s car. X is a marketplace facilitator. X must collect Iowa sales tax and applicable local option sales tax on the sales price of the ride. Because D makes all of D’s Iowa sales through X, which collects all applicable taxes on all of D’s rides, D does not need to register for an Iowa sales tax permit or file an Iowa sales tax return. X will report the sales tax on X’s Iowa sales tax return.
Example 2: D provides rides for X and Y, two different transportation network companies. X is a marketplace facilitator responsible for collecting and remitting Iowa sales tax and applicable local option sales tax on the sales price of the rides D provides through X’s network. Y is also a marketplace facilitator responsible for collecting all applicable taxes on the rides D provides through Y’s network. D does not need to register for an Iowa sales tax permit or file an Iowa sales tax return.
Example 3: D independently provides rides in addition to providing rides through X’s network. X must collect all applicable taxes on the rides D provides through its network. X is not responsible for collecting tax on any of the rides D provides independent from X’s network. D, a seller of personal transportation service with physical presence in Iowa, must collect and remit Iowa sales tax and applicable local option sales tax on the sales price of the rides D sells independent of X’s network.
	211.51(2) Tax imposed; sourcing. The sales price from the sale of personal transportation service in Iowa is subject to Iowa sales tax. The tax is imposed if the personal transportation service is first used in Iowa and is sourced to the location at which the service is first received.
Example: R schedules a personal transportation service while at R’s residence in Des Moines. R schedules the transportation service to transport R from Grinnell to Iowa City. R independently travels to Grinnell, where R enters a vehicle owned by the transportation service. The transportation service takes R from Grinnell to Iowa City, where the service ends and R pays for the service. The sale is sourced to Grinnell, the location at which R first received the transportation service. The transportation service must charge sales tax and the applicable local option tax in Grinnell, even though R scheduled the service while in Des Moines and the service concluded and payment was made in Iowa City.
	211.51(3) No tax imposed on interstate motor carrier transportation service. Where a personal transportation service involves interstate travel by a motor carrier as defined in 49 U.S.C. Section 13102(14), no tax shall be imposed on the transaction to the extent prohibited by 49 U.S.C. Section 14505.
	211.51(4) Exemption for transportation services furnished by a qualified public transit system, medical transportation service, or paratransit service. The sales price from sales of transportation services by public transit systems, medical transportation services, or paratransit services is exempt from tax. For purposes of the exemption under Iowa Code section 423.3(106), the following definitions shall apply:
“Medical transportation” means a personal transportation service for an individual to travel to a health care provider for the individual’s medical care. Medical transportation is not limited to transportation services for immediate life-threatening or serious injuries.
“Paratransit service” means a personal transportation service provided to individuals with disabilities.
“Public transit system” means a public transit system as defined in Iowa Code section 324A.1(4).
This rule is intended to implement Iowa Code sections 423.2(6)“ac” and 423.3(106).
[ARC 6704C, IAB 11/30/22, effective 1/4/23]