Must a parking-garage manager collect Iowa sales tax when it operates the owner's garage as the owner's agent?

Plain-English summary

Parking in the FHLB garage was a taxable service, and Keck Parking had collection duties as FHLB's agent—not as the retailer earning the parking revenue.

FHLB owned the garage. Under the management agreement, Keck Parking operated it, collected customer payments into an account for FHLB, paid operating costs from that account, and received a flat management fee.

The Department concluded:

• selling parking spaces by the day or month was furnishing a taxable parking-facility service;
• Keck Parking was not the seller-retailer because it did not own the spaces or derive the parking revenue;
• the agreement nevertheless made Keck Parking FHLB's agent, so Iowa Code § 423.14(1)(a) required it to collect and remit tax in that capacity; and
• if FHLB was not required to collect tax, Keck Parking likewise had no collection duty as its agent.

The Department did not decide whether FHLB's asserted federal-entity status created an exemption, because FHLB was not a party and had not consented to be bound.

What this means for you

Parking-facility owners

Parking charges are taxable even when a management company operates the facility. The owner's own exemption position must be established separately.

Parking managers

A manager that collects customer payments for the owner may have collection duties as the owner's agent even if the manager is not itself the retailer.

Tax professionals

Read the management agreement and trace who owns the spaces, earns the parking revenue, controls the operating account, and authorizes the manager to act.

Common questions

Q: Are daily and monthly parking charges both taxable?
A: Yes. The cited rule says the charging period is irrelevant.

Q: Was Keck Parking the retailer?
A: No. It did not own the parking spaces or derive the parking revenue under the agreement.

Q: Why did it still have to collect tax?
A: Iowa law requires collection by retailers or their agents, and the agreement and operating facts established an agency relationship.

Q: Did the order hold that FHLB was taxable?
A: No. The Department declined to decide FHLB's exemption or liability without FHLB as a consenting party.

Citations and references

• Iowa Code § 423.2(6)(ak) — parking facilities as a taxable service
• Iowa Code § 423.14(1)(a) — collection by sellers who are retailers or their agents
• Iowa Code §§ 423.1(47), 423.1(53) — retailer and seller definitions
• Iowa Code § 423.3(31)(a) — governmental-entity exemption raised in the petition
• Iowa Administrative Code rule 701—211.12 — operation of a parking facility for a fee

Source

• Landing page: https://revenue.iowa.gov/resources/law-policy-information/administrative-orders
• Archive document link: https://revenue.iowa.gov/media/4503/download?inline
• Original PDF: https://documents.iowa.gov/home/PreviewDocument/10540333

Original ruling text

PARKING, INC. DBA KECK PARKING (DO) 2026
BEFORE THE IOWA DEPARTMENT OF REVENUE
HOOVER STATE OFFICE BUILDING
DES MOINES, IOWA
IN THE MATTER OF
PARKING, INC. DBA KECK PARKING
475 SW 5TH ST
DES MOINES IA 50309-4666
SALES/USE/EXCISE TAX

DECLARATORY ORDER
DOCKET NO. 1213390

Pursuant to a Petition for Declaratory Order (“Petition”) filed with the Iowa Department of
Revenue (“Department”) by Parking, Inc. DBA Keck Parking (“Petitioner”) on January 22, 2026, and in
accordance with Iowa Code section 17A.9 (2026) and Iowa Administrative Code rule 701—4.7(17A),
“Declaratory order-in general,” the Director issues the following order.
I.

FACTS
The facts below are based on the Petition, a response to a request for information provided by

Petitioner on February 26, 2026, and a Management Agreement (“Agreement”) between Petitioner and
Federal Home Loan Bank of Des Moines (“FHLB”).
Petitioner is a company that is retained by the owners of parking facilities to manage and operate
those parking facilities. Petitioner has entered into a contract with FHLB to manage and operate a parking
facility owned by FHLB. The parking facility contains spaces that FHLB plans to use for its own purposes
and additional parking spaces that will be offered for a fee to individuals and businesses for daily or
monthly parking. Petitioner describes FHLB as a federally chartered entity.
Petitioner provided a copy of the Agreement and describes the way in which it manages and
operates the parking facility. Under the Agreement, Petitioner is to act as FHLB’s agent and is responsible
for the operation and maintenance of the parking facility. These responsibilities include opening an
operating account with seed money from FHLB. Per the Agreement, funds from this account are to be

used for the operating costs of the parking facility. The Agreement also requires that Petitioner collect
parking fees from customers and place them into the operating account. Petitioner states that it will
follow this procedure if it is deemed to be acting as an agent for FHLB. If Petitioner is deemed the seller,
then the Petition states that Petitioner would deposit these amounts into its own account. This order will
evaluate Petitioner’s sales tax liability under the provided Agreement that Petitioner states it has entered
into.
Petitioner receives a management fee for its services for which it issues itself a check from the
operating account. The funds from the operating account are not to be commingled with any of
Petitioner’s other funds. The Agreement also requires that Petitioner write checks from the operating
account for the operation of the parking facility, provide reports on expenditures to FHLB, and serve
various customer service, maintenance, and advertising functions.
II.

ISSUES PRESENTED
Petitioner presented the following questions for consideration:

1. Whether Petitioner must collect and remit sales tax on the sales price of the parking spaces
   in the parking garage owned by FHLB. 1
2. Whether this determination changes based on whether Petitioner acts as an agent of FHLB.

III.

STANDARD OF REVIEW
Declaratory Orders under the Iowa Administrative Procedure Act:
Iowa Code chapter 17A, the Iowa Administrative Procedure Act (“IAPA”), was enacted “to provide

a minimum procedural code for the operation of all state agencies when they take action affecting the
rights and duties of the public.” Iowa Code § 17A.1(2). Under the IAPA, “[a]ny person may petition an

In the Petition, Petitioner asked whether the sales price of the parking spaces is subject to Iowa sales tax and
asked whether it “must collect and remit sales tax on these transactions.” In its response to a request for
additional information, it asked whether it “should” collect and remit sales tax on these amounts. This order will
address Petitioner’s obligation to collect and remit sales tax.

1

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agency for a declaratory order as to the applicability to specified circumstances of a statute, rule, or order
within the primary jurisdiction of the agency.” Id. § 17A.9(1)(a). The IAPA also describes agency rights and
responsibilities with respect to declaratory order proceedings. Id. § 17A.9(8). Pursuant to Iowa Code
section 17A.9(2), the Department adopted Iowa Administrative Code rule 701—4.7, which outlines
department-specific rules governing declaratory orders.
The purpose of a declaratory order is to provide a “generally available means for persons to obtain
reliable information about agency administered law as it applies to their particular circumstances.” Sierra
Club Iowa Chapter v. Iowa Dep’t of Transp., 832 N.W.2d 636, 647 (2013) (citing Arthur Earl Bonfield,
Amendments to Iowa Administrative Procedure Act, Report on Selected Provisions to Iowa State Bar
Association and Iowa State Government, 1–8 (1998)). Declaratory orders are not contested cases that
“entitle parties affected by the agency action to an adversarial hearing” in order to “adjudicate disputed
facts pertaining to particular individuals in specific circumstances.” Greenwood Manor v. Iowa Dep’t of
Pub. Health, State Health Facilities Council, 641 N.W.2d 823, 834 (Iowa 2002); see also Iowa Code §
17A.12. Instead, the IAPA “contemplates declaratory rulings by administrative agencies on purely
hypothetical sets of facts.” City of Des Moines v. Pub. Emp’t Relations Bd., 275 N.W.2d 753, 758 (Iowa
1979).
As such, “[t]he procedure established by section 17A.9 allows persons to seek formal opinions on
the effect of future transactions and arrange their affairs accordingly.” Bennett v. Iowa Dep’t of Nat. Res.,
573 N.W.2d 25, 26 (Iowa 1997). Declaratory orders issued by an administrative agency do, however, have
“the same status and binding effect as any final order issued in a contested case proceeding.” Iowa Code
§ 17A.9(7). The Department’s rules governing declaratory orders are consistent with this understanding
of the role of declaratory orders in administrative procedure. See Iowa Admin. Code r. 701—4.7.

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IV.

DISCUSSION
A.

The service at issue is subject to sales tax in Iowa

Petitioner requests a decision on its obligation to collect and remit sales tax on the parking spaces
offered to customers in the garage owned by FHLB. We begin by evaluating whether the service at issue
is a taxable service. Iowa imposes sales tax on “the sales price from the furnishing of services as defined
in section 423.1.” Iowa Code § 423.2(5). Further, the “sales price of any of the . . . enumerated services
[listed in subsection 423.2(6)] is subject to the tax imposed by subsection 5.” Id. § 423.2(6). Included in
the list of taxable services enumerated by the Code is “[p]arking facilities.” Id. § 423.2(6)(ak). This section
is implemented by Iowa Administrative Code rule 701—211.12. Iowa Administrative Code rule 701—
211.12(1) states, “[p]ersons engaged in the business of operating a parking facility for a fee are selling a
service subject to sales tax.” Under Iowa Administrative Code rule 701—211.12(2), a parking facility is
“any place that is used for parking a vehicle for consideration.” This subrule goes on to state, “[I]t is
irrelevant whether the charge is by the hour, day, month, or any other period of time.”
Petitioner provides an Agreement it has in place with FHLB to operate a parking garage owned by
FHLB, selling parking spaces to individuals and to area businesses for various periods of time. These
customers pay for the use of these spaces. Therefore, the space in question is being used to park vehicles
for consideration as described by Iowa Administrative Code rule 701—211.12(1). Therefore, the space in
question is a parking facility. The described service is the operation of a parking facility where, under the
Agreement with FHLB, Petitioner performs tasks for the daily operation of a parking facility. The service
at issue is subject to sales tax in Iowa, subject to any potential exemptions.
B.

The exemptions raised in the Petition do not apply to Petitioner

In the Petition and in Petitioner’s additional response to a request for information, Petitioner
discusses exemptions relevant to federal entities. Specifically, Petitioner discusses the exemption in Iowa
Code section 423.3(31)(a), which exempts from sales tax the sales price of tangible personal property sold

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to and services furnished to “a tax-certifying or tax-levying body of the state or a governmental subdivision
of the state, including . . . all divisions, boards, commissions, agencies, or instrumentalities of state,
federal, county, municipal, or tribal government.” In its response to a request for information, Petitioner
also referenced an argument about the constitutionality of a state taxing the federal government, but did
not further evaluate the potential applicability of such an argument.
Petitioner is not a federal entity and has not provided any information on making sales to a federal
entity. Petitioner asserts that FHLB is a federal entity and discusses these exemptions as being relevant to
FHLB. Iowa Code section 17A.9(1)(b)(2) prohibits the Department from issuing a declaratory order " . . .
that would substantially prejudice the rights of a person who would be a necessary party and who does
not consent in writing to the determination of the matter by a declaratory order proceeding." Because
FHLB is not a party to the Petition and has not consented to be bound by this order, the order will not
evaluate exemptions as they may apply to FHLB or FHLB’s sales tax liability.
C.

Petitioner is not a seller who is a retailer

According to Iowa Code section 423.14(1)(a), sales tax “shall be collected by sellers who are
retailers or by their agents.” Iowa Code section 423.1(53) defines “seller” as “any person making sales,
leases, or rentals of personal property or services.” Iowa Code section 423.1(47) defines “retailer” as
“every person engaged in the business of selling tangible personal property, specified digital products, or
taxable services at retail . . . from which revenues are derived.”
According to the Petition and the Agreement, Petitioner is tasked with providing customer
service, collecting customer payments, advertising the parking garage, maintaining the parking garage,
and other operational tasks. According to the provided Agreement, Petitioner does not retain the revenue
from these sales. Rather, Petitioner places these amounts into an operating account for FHLB. Petitioner
is paid a flat fee by FHLB out of the operating account for its services. Although Petitioner is soliciting
customers and taking payments in exchange for parking, it does not own the parking spaces that are being

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offered for a fee and it is not deriving revenues from these sales. Rather, Petitioner is a service provider
that collects payments and places them into the operating account as mandated by the Agreement.
Therefore, Petitioner is not obligated to collect and remit Iowa sales tax as a “seller who is a retailer”
under Iowa Code section 423.14(1)(a).
D.

Petitioner is obligated to collect and remit sales tax in its capacity as an agent

The service of “parking facilities” is subject to sales tax under Iowa Code section 423.2(6)(ak). As
discussed above, Petitioner is not a “seller who is a retailer.” Under Iowa Code section 423.14(1)(a), sales
tax “shall be collected by sellers who are retailers or by their agents.” Petitioner asks about its obligation
to collect and remit sales tax as FHLB’s agent. An agency relationship requires “(1) manifestation of
consent by one person, the principal, that another, the agent, shall act on the former's behalf and subject
to the former's control and (2) consent by the latter to so act. Vroegh v. Iowa Dep’t of Corr., 972 N.W.2d
686, 707 (Iowa 2022) (quoting Pillsbury Co. v. Ward, 250 N.W.2d 35, 38 (Iowa 1977)). The Agreement
states in Article IX Paragraph C, “[Petitioner] shall be deemed [FHLB’s] agent for performance of the
operation and maintenance responsibilities assumed by [Petitioner] under this Agreement.” The inclusion
of this clause indicates mutual consent by Petitioner and FHLB for Petitioner to act as an agent.
In addition to the Agreement specifically stating that Petitioner is acting as an agent in the
operation of the parking garage, the Agreement as a whole and the facts provided in the Petition indicate
that Petitioner is acting as an agent. Article III section A of the Agreement lists requirements of Petitioner.
This section requires Petitioner to manage all contracts related to the parking operation on FHLB’s behalf.
This clause also requires that Petitioner provide copies of service contracts to FHLB upon request, which
also indicates that Petitioner is primarily in charge of these contractual relationships. This section also
requires Petitioner to set up an operating account on FHLB’s behalf with funds supplied by FHLB and
requires Petitioner to use the funds to operate the parking facility and place all revenues in the fund. The
requirements that Petitioner manage these contracts and operate the parking facility in this manner

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indicate that Petitioner is acting on FHLB’s behalf under its control in the operation of the parking facility
and that both Petitioner and FHLB have agreed to this arrangement in the Agreement. Petitioner is not a
“seller who is a retailer” under Iowa Code section 423.14(1)(a) as discussed above, but operating a parking
facility is a service that is subject to sales tax. Because Petitioner is acting as an agent in the sale of the
taxable service at issue, it is obligated to collect and remit sales tax only in its capacity as an agent of FHLB
under the provided Agreement and facts.
V.

CONCLUSION
Operating a parking facility is a service that is subject to Iowa sales tax under Iowa Code section

423.2(6)(ak). For purposes of FHLB’s parking facility, Petitioner is not a “seller who is a retailer” under
Iowa Code section 423.14(1)(a). However, Petitioner is obligated to collect and remit Iowa sales tax only
in its capacity as an agent of FHLB under the provided Agreement and facts. If FHLB is not required to
collect sales tax for furnishing the service of parking facilities, Petitioner is also not required to collect
sales tax in its role as FHLB’s agent; however, the Director cannot evaluate whether FHLB is required to
collect sales tax in this declaratory order.

ORDER
THEREFORE, based on the facts presented, foregoing reasoning, and applicable provisions of the
law, the questions presented in Petitioner’s Petition for Declaratory Order, Docket No. 1213390 are
answered above.

May
Issued at Des Moines, Iowa this _
2026.
4th day of ______,
IOWA DEPARTMENT OF REVENUE

~

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By ______
Mary Mosiman, Director