Bill Humbert, a recruiter in Iowa, claims that Iowa’s sales tax on employee recruitment fees is unfair.
Recruiters who only placed individuals in employment at locations outside of Iowa are not subject to the tax if the person’s principal place of employment is outside of Iowa.
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However, he learned last month that his company now owes sales tax on recruitment services provided to out-of-state companies, according to the Cedar Rapids Gazette.
That’s because Iowa state law says that out-of-state exclusion doesn’t apply to executive search firms, and Humbert found out the hard way that an “executive position” simply meant someone earning $30,000 per year or more.