Did Iowa decide whether labor for egress windows, sump pumps, foundation-wall replacement, and foundation braces is subject to sales tax?

Plain-English summary

Iowa did not decide whether Dry Duck's four basement-work labor services were taxable.

Dry Duck asked about labor for installing new egress windows, installing a new sump pump, replacing foundation walls, and adding foundation braces. The Department requested more detail on May 5, 2026, including descriptions of the services, the specific Iowa Code provisions Dry Duck wanted analyzed, and the exemptions it believed applied. The order says Dry Duck did not respond by the time the order was issued.

The Director therefore refused to issue a substantive declaratory order. The petition did not provide enough facts to determine whether the services fell within the taxable services listed in Iowa Code § 423.2(6), and it did not identify the claimed exemptions or facts showing that their requirements were met.

The refusal did not prevent Dry Duck from filing a new petition with the requested information.

What this means for you

Contractors and basement-service businesses

This order is not authority that egress-window, sump-pump, foundation-wall, or foundation-brace labor is taxable or exempt. It leaves all four questions unanswered.

Businesses seeking an Iowa declaratory order

Describe each service in enough detail to apply the law. The source says a petition must provide all relevant facts and cite the statutes, rules, policies, decisions, orders, or other law whose application is questioned. If claiming an exemption, identify it and provide facts addressing its requirements.

Accountants and tax professionals

Do not treat a refusal to issue an order as a merits ruling. The Department expressly said it could not determine whether Dry Duck's services were listed taxable services or qualified for an exemption on the record provided.

Common questions

Q: Did Iowa say labor to install a new egress window is taxable? A: No. The Department refused to answer because the petition lacked sufficient details and legal authorities.

Q: Did Iowa decide the sump-pump, foundation-wall, or foundation-brace questions? A: No. The same refusal covered all four services.

Q: Why was the petition insufficient?
A: It did not adequately describe the services, identify the specific provisions to analyze, or explain which exemptions were claimed and why their requirements were met.

Q: Can Dry Duck ask again?
A: Yes. The order says the refusal does not preclude a new petition containing the requested information.

Q: Which declaratory-order rule applies now?
A: The order says former Iowa Administrative Code rule 701—4.7 was rescinded effective July 1, 2026, and the Department's declaratory-order rules moved to chapter 701—2503. It used former rule 4.7 because Dry Duck filed its petition before that date.

Citations and references

• Iowa Code § 17A.9 (2026) — agency declaratory orders
• Iowa Code § 423.2(6) — taxable-service list the Department said it could not apply without more facts
• Iowa Administrative Code r. 701—4.7(1)“c”(2) — petition requirements quoted in the order
• Iowa Administrative Code r. 701—4.7(10)“a”(6) — refusal when facts or questions are unclear, overbroad, insufficient, or otherwise inappropriate
• Iowa Administrative Code r. 701—4.7(10)“c” — filing a new petition after refusal
• 2026 Iowa Acts, Senate File 2463, § 4(4) — rule 4.7 rescission and relocation noted in the order
• City of Des Moines v. P.E.R.B., 275 N.W.2d 753, 758 (Iowa 1979) — declaratory orders on disclosed factual circumstances

Source

• Landing page: Iowa Administrative Orders
• Archive document link: Dry Duck order
• Original PDF: Docket No. 1301188

Original ruling text

BEFORE THE IOWA DEPARTMENT OF REVENUE
HOOVER STATE OFFICE BUILDING
DES MOINES, IOWA
IN THE MATTER OF
DRY DUCK BASEMENT WATERPROOFING
LLC
3000 SCOTT AVE
DES MOINES IA 50317-1302

REFUSAL TO ISSUE
DECLARATORY ORDER
DOCKET NO. 1301188

SALES AND USE

Pursuant to a Petition for Declaratory Order (“Petition”) filed with the Iowa Department of Revenue (“Department”) by DRY DUCK BASEMENT WATERPROOFING LLC (“Dry Duck” or “Petitioner”) on April 13, 2026, and in accordance with Iowa Code section 17A.9 (2026) and Iowa Administrative Code rule 701—4.7(17A) (2026), 1 the Director issues the following order. I.

FACTS
The findings of fact are based on the Petition. Petitioner is in the business of

waterproofing basements and requested a declaratory order seeking clarification on whether several services it provides are subject to sales tax or are exempt from sales tax. A request was sent on May 5, 2026 to provide detailed information about the services listed in the petition; an identification of the specific Code provisions the Petitioner wanted the Department to analyze; and information on the exemptions from

As of July 1, 2026, Iowa Administrative Code rule 701—4.7 on Declaratory Orders is rescinded. 2026 Iowa Acts, Senate File 2463, Section 4, Subsection 4. The Department of Revenue’s Administrative Code rules on Declaratory Orders are now found in Iowa Administrative Code chapter 701—2503. As the Petition was filed prior to this date, citations are made to rule 4.7. 1

sales tax the Petitioner believes it would qualify for. As of the date of this declaratory order, no response to the requested information was received. II.

ISSUES PRESENTED
The petitioner presented four issues for consideration:

1. Whether the labor on installing new egress windows is subject to sales
   tax?
2. Whether the labor on installing a new sump pump is subject to sales
   tax?
3. Whether the labor on replacing foundation walls is subject to sales tax?
4. Whether the labor on adding foundation braces is subject to sales tax?

III.

STANDARD OF REVIEW
Declaratory Orders under the Iowa Administrative Procedure Act The function of a declaratory order is to provide “reliable advice from an agency as

to the applicability of unclear law.” Arthur Earl Bonfield, The Iowa Administrative Procedure Act: Background, Construction, Applicability, Public Access to Agency Law, The Rulemaking Process, 60 Iowa L. Rev. 731, 805 (1975). Iowa Code section 17A.9 contemplates declaratory orders by administrative agencies on a disclosed set of facts. City of Des Moines v. P.E.R.B., 275 N.W.2d 753, 758 (Iowa 1979). A declaratory order enables the public to secure definitive binding advice as to the applicability of agencyenforced law to a particular set of facts. Bonfield, supra, at 822–23. A declaratory order is not a “contested case” as defined in Iowa Code section 17A.2(5) as it is not an evidentiary hearing, a separate administrative remedy set forth in Iowa Code chapter 17A and in the Department’s rules. See Iowa Admin. Code r. 701— 4.7(17A). Therefore, for the purposes of a declaratory order, the Director views the issues raised in the petition as questions of law applicable to future factual situations as disclosed

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in the petition. This view is consistent with Iowa Administrative Code rule 701—4.7 concerning the issuance of declaratory orders. IV.

DISCUSSION
For the reasons stated below, the Director refuses to issue a declaratory order in

response to DRY DUCK BASEMENT WATERPROOFING LLC’s Petition. Pursuant to Iowa Administrative Code rule 701—4.7(1)"c"(2), a petition for a declaratory order must contain, among other things, the following:

1. A clear and concise statement of all relevant facts on which the order
   is requested;
2. A citation and the relevant language of the specific statutes, rules,
   policies, decisions, or orders, the applicability of which is questioned, and any other relevant law. The Petition does not meet these requirements. The Petition lacks sufficient detail about the services Petitioner performs to make a determination as to whether their services would or would not qualify as any of the services subject to tax listed in Iowa Code section 423.2(6). Additionally, the Petitioner states that some services would be exempt from tax but the Petition lacks sufficient information to make a determination as to what exemption is claimed and whether the qualifications for that exemption are met. Absent this information, the Director is unable to adequately respond to the questions raised in the Petition. Accordingly, pursuant to Iowa Administrative Code rule 701—4.7(10)“a”, the Director therefore refuses to issue a declaratory order for the following reasons: (6) The facts or questions presented in the petition are unclear, overbroad, insufficient, or otherwise inappropriate as a basis upon which to issue an order;

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The refusal to issue this declaratory order does not preclude the Petitioner from filing a new petition with the requested information as provided in Iowa Administrative Code rule 701—4.7(10)"c". Issued at Des Moines, Iowa this ____ 8th day of July, 2026.

IOWA DEPARTMENT OF REVENUE

By ______
Mary Mosiman, Director

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