Associates Leasing, Inc. v. Iowa State Department of Revenue & Finance

LARSON, Justice.

Iowa’s use tax, found in Iowa Code chapter 423 (1987), was enacted to complement our sales tax by removing a buyer’s temptation to purchase goods out of state to avoid payment of a sales tax. As the name suggests, the tax is on the use of such goods in Iowa, not their purchase. See Inter-State Nurseries, Inc. v. Iowa Dep’t of Revenue, 164 N.W.2d 858, 861 (Iowa 1969). Associates Leasing, Inc., purchased several tractors and trailers outside Iowa for use in interstate commerce. It did not pay a use tax in Iowa, claiming a statutory exemption. The department of revenue ruled that…