Iowa Sales Tax

On this page you will find handy sales and use tax information about Iowa.

How to use this page:

We’ve pulled in the information from all our Charts for a consolidated view by state.  Here you can see the sales tax rates and if the state has remote seller nexus rules. You can also see any sales tax holidays or amnesty programs that may exist, though these do not apply to all states.

Below the chart you can find any News & Tip item we have published that relates to Iowa that you can filter by topic. This will help you get informed on current and past legislation that has passed in the state.

State Rate

6.000% Remote sellers are required to collect sales tax if they exceed Iowa’s economic nexus threshold.

Range of Local Rates

0% – 2% Some local jurisdictions do not impose a sales tax.

Local Rates Apply to Use Tax

No Remote sellers are required to collect sales tax if they exceed Iowa’s economic nexus threshold.

CLICK-THROUGH NEXUS

1/1/2019

AFFILIATE NEXUS

6/11/2013 and 1/1/2019

REPORTING REQUIREMENTS

1/1/2019

ECONOMIC NEXUS

1/1/2019 – see state notice

MARKETPLACE NEXUS

1/1/2019

Annual Back to School Holiday

August 5-6, 2022

1. Clothing and footwear – less than $100 per item (excluding clothing accessories).

Status

Inactive

Amnesty Filing Dates

July 1, 2012 - November 1, 2013

Go to Iowa Amnesty Page
AMNESTY INCLUSION PERIODS

TAX TYPES AND CONDITIONS

Unclaimed Property

AMNESTY BENEFITS

Waiver of interest and penalties.

Administration Information
Streamlined Sales Tax Status

Full Member

NUMBER OF TAXING AUTHORITIES

1,002 Sales Tax Jurisdictions

HOME RULE AUTHORITIES

N/A

Sales Tax Sourcing (Intrastate)

Destination

Sales Tax Return Due Date

Last day of the month following the reporting period

Exemption Information
RESALE CERTIFICATE

Iowa Resale Certificate

TYPES OF EXEMPTIONS

Product types of exemptions: resale, leasing, farm machinery and equipment, processing, R&D equipment, specified digital products, production utilities, pollution control equipment

 

Entity types of exemptions: sales from educational, religious, or charitable activities; government agencies, museums, residential care facilities

 

Iowa Exemption Certificate Forms

State Links
State Tax Web Page

Iowa Department of Revenue

Rate Look-Up Page

Iowa Sales Tax Rate Look-Up

Registration Link

Register for Iowa Sales Tax

History & Fun Facts
HISTORY

  • Iowa sales tax was first imposed in 1934 at a rate of 2 percent and applied only to gross receipts from the sale of tangible personal property, metered gas, electricity, water, communication services, and amusement and athletic event admissions.
  • Iowa sales tax was made permanent on April 1, 1937 and the state imposed a complimentary use tax.
  • In 2004, Iowa enacted legislation to conform with the Streamlined Sales and Use Tax Agreement.

FUN FACTS
  • In 2007, the Iowa Department of Revenue sent retailers a bulletin reminding them to quiz customers about their intentions for the purchase of pumpkins. Iowa taxes retail sales but exempts groceries and was losing out on tax dollars – particularly around Halloween – when pumpkins were categorized as food at checkout.

Streamlined Sales Tax Member States Submit New Certificates of Compliance and Update Tax Administration and Taxability Matrices for 2022

All Streamlined Sales Tax Agreement member states have now submitted their 2022 updated certificates of compliance, tax administration practice matrices, and updated library of definitions.

Iowa Updates Sales Tax Base

A new Iowa law modified their sales tax base. In short, the changes include combining sales and use tax returns and their permits into one.

State Notices & Resources for Remote Sellers

Use this state by state guide to find each state\’s initial guidance on how to proceed post-Wayfair, state resources such as FAQs, and any state activity such as going through a legislative process that impacts remote sellers.

Iowa Provides Clarification on Exemption for Solar Energy Equipment

Iowa has a sales tax exemption for the sale of solar energy equipment which is defined as “equipment that is primarily used to collect and convert incident solar radiation into thermal, mechanical, or electrical energy or equipment that is primarily used to transform such converted solar energy to a storage point or to a point of use.”

Iowa Adds Guidance About Sales Tax for Web Hosting Services

The Iowa Department of Revenue issued guidance stating that web hosting is not taxable as a service in the state.

Economic Nexus State by State Chart

Key information such as effective dates, thresholds, and includable sales for out-of-state sellers making sales into states that have enacted economic nexus legislation both before and after the South Dakota v. Wayfair Supreme Court decision.

Sales Tax Holiday Season is Here

With sales tax holiday season right around the corner, now is a good time to look at how sales tax holidays work and examine the different types of holidays that states offer.

Iowa Adopts New Rules Related to Bundled Transactions and Specified Digital Products

The Iowa Department of Revenue adopted new rules on bundled transactions and specified digital products to fully implement the language and definitions part of legislation enacted in 2018.

Iowa Provides Guidance on Exemption for Computers and Computer Peripherals

Iowa has provided guidance regarding the state’s sales tax exemption for computers and computer peripherals.

Iowa Enacts Change to Persons Eligible for Manufacturing Exemption

Effective August 19, 2020, Iowa has enacted legislation that narrows the limitation on persons eligible for the state’s manufacturing sales tax exemption.

Sellers May Be Contacted About Other Taxes Under New Streamlined Sales Tax Governing Board Rule

Sellers registered through SSTP may be contacted about other taxes in the member states where they register with the SSTP.

Iowa Department of Revenue Explains Sales Tax Responsibilities of Food Manufacturer Remote Seller

The Iowa Department of Revenue issued a ruling to explain the sales tax implications of a remote seller that sells baked goods and other products into the state.

Iowa Expands Tax Base to Include Additional Specified Services

Iowa has enacted legislation that expands the state’s tax base to include additional specified services, effective January 1, 2019.

Home Improvement Labor Subcontracted by Big Box Retailer is Subject to Iowa Sales Tax

The Supreme Court of Iowa has ruled that installation labor for specific home improvement projects subcontracted by Lowe’s is subject to Iowa sales tax while other specified subcontracted installation labor is exempt. Lowe’s had appealed a district court’s judgement affirming…

House Introduces Online Sales Simplicity and Small Business Relief Act of 2018

On September 13, 2018, Rep. Jim Sensenbrenner (R-WI) and additional U.S. House members introduced the Online Sales Simplicity and Small Business Relief Act of 2018.

Remote Seller Resources

Comprehensive list of resources for remote sellers following the South Dakota v. Wayfair Supreme Court decision – including state notices, videos, articles, training opportunities, and more.

U.S. Supreme Court Issues Decision In South Dakota v. Wayfair

On June 21, 2018, the U.S. Supreme Court issued its decision in the South Dakota v. Wayfair case, ruling in favor of South Dakota and overturning Quill’s physical presence rule.

Iowa Enacts Changes to Definition of Manufacturer and Manufacturing

Iowa has enacted narrowing legislation that makes changes to the terms “Manufacturer” and “Manufacturing” for purposes of the state’s manufacturing exemption.

Iowa Expands Tax Base to Include Specified Digital Products

Iowa has enacted legislation that subjects specified digital products and services to state sales and use tax with exemptions for use by commercial enterprises.

Iowa Enacts Remote Seller Nexus Provisions

Iowa Governor Kim Reynolds has signed legislation containing extensive remote seller nexus provisions, effective January 1, 2019.

Iowa Issues Notice About New Water Service Excise Tax

The Iowa Department of Revenue has provided guidance regarding the state’s new Water Service Excise Tax (WET) that takes effect on July 1, 2018.

South Dakota v. Wayfair Analysis & Predictions: Sales Tax Experts Weigh-In

Sales tax experts lend their insight into and predictions for one of the most important U.S. Supreme Court decisions regarding sales tax in decades, South Dakota v. Wayfair.

Multistate Tax Commission Updates Its Uniform Sales & Use Tax Exemption Certificate

The Multistate Tax Commission (MTC) revised its Multijurisdictional Uniform Sales & Use Tax Exemption/Resale Certificate on January 22, 2018 to reflect two state changes.

Record Number of Sellers Participate in 2017 MTC Amnesty Program

The volume of applicants for the 2017 online marketplace seller tax amnesty program overwhelmed the Multistate Tax Commission.