Iowa DOR Issues Updated Tax Guidance for Barbers, Cosmetologists

The Iowa Department of Revenue (DOR) has issued updated guidance for barbers and cosmetologists regarding their tax obligations in the state. The guidance provides information on how to determine whether workers are employees or independent contractors based on IRS criteria of behavioral control, financial control, and relationship factors, with practical examples illustrating different employment scenarios. It outlines specific tax responsibilities for employees, independent contractors, and employers, including income tax withholding requirements, sales tax collection obligations, and necessary tax registrations and filings. The guidance also clarifies that barber and beautician services are subject to Iowa sales tax and local option sales ...