Iowa: Sales Tax Handbook
Iowa Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
|6.00%||0.00% - 1.00%||0.901%||6.901%||7%|
2016 Iowa Sales Tax Handbook
Iowa Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
Iowa's Sales Tax By The Numbers:
Iowa has a higher-than-average sales tax, including when local sales taxes from Iowa's 130 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 22nd highest by combined state + local sales tax
Ranked 20th highest by per capita revenue from state + local sales taxes ($1,047 per capita)
Rankings by State Sales Tax Only:
Ranked 7th highest by state sales tax rate
Ranked 24th highest by per capita revenue from the statewide sales tax ($817 per capita)
Printable PDF Iowa Sales Tax Datasheet
Iowa has a statewide sales tax rate of 6.00%, which has been in place since 1933.
Municipal governments in Iowa are also allowed to collect a local-option sales tax that ranges from 0.00% to 1.00% across the state, with an average local tax of 0.901% (for a total of 6.901% when combined with the state sales tax). The maximum local tax rate allowed by Iowa law is 1.00%. You can lookup Iowa city and county sales tax rates here.
This page provides an overview of the sales tax rates and laws in Iowa. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Iowa Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in Iowa?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Iowa taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the Iowa sales tax see Iowa sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Iowa? Taxation of vehicle purchases in particular are discussed in the page about Iowa's sales tax on cars.
Are services subject to sales tax in Iowa?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Iowa, services are generally not taxable.
About the Iowa Sales Tax
Iowa allows local governments to optionally collect a local sales tax of 1%, which is done by most cities and counties. Notably, the Iow sales tax also applies to most services in addition to the sale of tangible goods.
Is the Iowa Sales Tax Destination-Based or Origin-Based?
Iowa is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Iowa from a Iowa vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
Is Iowa a Streamlined Sales Tax State?
Iowa is a member of the Streamlined Sales and Use Tax Agreement, which means that the Iowa Department of Revenue has taken significant steps to simplify Iowa's sales tax rules and administration process.
Contact the Iowa Department of Revenue
The Iowa Sales Tax is administered by the Iowa Department of Revenue. You can learn more by visiting the sales tax information website at www.iowa.gov.
Phone numbers for the Sales Tax division of the Department of Revenue are as follows:
- Local Phone: (515) 281-3114
- Toll-Free Phone: (800) 367-3388
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Iowa sales taxes, we recommend the following books:
Simplify Iowa sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Iowa Sales Tax Rates by Zip Code:
Need an updated list of Iowa sales tax rates for your business? Download our Iowa sales tax database!