Gazette Editorial Board
Requiring police officers to collect and pay state sales tax on off-duty work, while allowing exemptions for such places as casinos, massage therapists, dry cleaners and carwashes, doesn’t make sense. It’s another example of the too-often wacky ways that special interests have influenced Iowa’s law governing sales tax, as The Gazette outlined in an in-depth news report on Sept. 23.
Yet as long as it’s the law, it warrants enforcement. And police officers, as much as anyone, should adhere to the sales tax law unless or until it’s changed.
We don’t doubt that the vast majority do comply. But the Iowa Department of Revenue told The Gazette last week it is collecting back sales tax from 46 Iowa police officers who haven’t paid up. The department said it’s checking for up to 10 years in back taxes.
Under state law, officers hiring out for off-duty work are required to obtain a state sales permit, collect the tax on the service they provide, remit the money and make quarterly and annual filing reports. That’s the standard process for any individual or business subject to the state sales tax law. And, of course, the officers are responsible for including the off-duty income on their income tax forms.
That said, the Revenue Department is sympathetic to the Iowa State Police Association and other law enforcement groups who have been lobbying for a change in the law. The department has advised those groups to convince state lawmakers to take action. So far, no go.
Police departments around the state vary in their approach to this issue. In Waterloo, the officers who moonlight are on their own to collect and pay the sales tax. In Cedar Rapids, a union committee coordinates the off-duty services requested from organizations or businesses, and collects the sales tax before paying the officers who were hired. Des Moines police don’t have such a committee, although their union coordinates security jobs.
We think legislators should exempt police officers from this tax. It wouldn’t cause the state a major loss of revenue. In Cedar Rapids, second largest city in the state, for example, the union group collects a total of $1,500 to $2,000 a month from all officers’ off-duty work.
But until that happens, officers are obligated to pay. It’s the law.
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