2024 Guide to State Sales Tax in Iowa

As an e-commerce seller, you will need to collect sales tax in Iowa if you have:

• gross revenue from sales of $100,000 or more in the previous or current calendar year (economic nexus), or
• physical presence in Iowa (physical nexus).

Below, we will highlight some of the basic provisions of Iowa sales tax law.

What is the tax rate range for Iowa?

State: Iowa’s general sales tax rate is 6%.

Local: Iowa localities impose their own sales tax at rates ranging from 0% to 1%.

Sales Tax Rate Chart.

Do you have physical or economic nexus in Iowa?

Physical nexus

Certain business activities create physical nexus in Iowa. If you have physical nexus, you are required to collect and remit sales tax on all sales that are shipped to Iowa.

Examples of business activities that can create physical nexus in Iowa include:

• Having or maintaining an office, distribution house, sales house, warehouse, or other place of business, or any representative operating within Iowa under the authority of the retailer or its subsidiary, irrespective of whether that place of business or representative is located here permanently or temporarily, or whether the retailer or subsidiary is admitted to do business in Iowa
• Maintaining an office, distribution facility, warehouse, storage place, or similar place of business in Iowa to facilitate the delivery of personal property or services sold by the retailer to the retailer’s customers.
• Using trademarks, service marks, or trade names in Iowa that are the same or substantially similar to those used by the retailer.
• Delivers, installs, assembles, or performs maintenance services for the retailer’s customers.

Sales Tax Nexus in Iowa.

Economic nexus

Remote sellers that have $100,000 or more in gross revenue for goods delivered electronically or physically into Iowa in the previous or current calendar year must collect and remit Iowa sales tax on taxable sales.

Additional information:

• Gross revenue includes all sales (whether taxable or exempt) and other sales (i.e., wholesale, sale for resale, etc.) of tangible personal property, services, or specified digital products sold into Iowa or for delivery into Iowa.
• Iowa sales includes all sales made by a remote seller by any means, including sales made through a marketplace.
• Remote sellers must collect Iowa sales tax and applicable local option sales tax starting on the first day of the next calendar month that starts at least 30 days from the day the remote seller first exceeded the economic nexus threshold. The Department will not hold the remote seller liable for sales tax it did not collect prior to this date.

Remote Sellers and Marketplace Facilitators.

What are examples of sales of taxable items?

• Tangible personal property, unless an exemption applies
• Certain services (Iowa Sales and Use Tax: Taxable Services)
• Clothing
• Leases and rentals of tangible personal property
• Specified Digital Products (e.g., movies, books, music, webinars)
• Software as a service (SaaS)

Iowa Sales and Use Tax Guide.

What are examples of sales of nontaxable/exempt items?

• Food (except candy, dietary supplements, soft drinks, and prepared food)
• Prescription drugs

Iowa Sales and Use Tax Guide.

Are there any sales tax holidays?

Yes. Iowa has a sales tax holiday on select clothing and footwear that begins at 12:01am on the first Friday in August and ends at midnight the following day.

Iowa’s Annual Sales Tax Holiday.

Is Iowa a member of the SST (Streamlined Sales Tax)?

Currently, Iowa is a full member of the Streamlined Sales Tax Governing Board (SSTGB).

How to get a sales tax permit / links to register in this state?

You can register online at:

• Streamlined Sales Tax Registration System
• Business Permit Registration

Rates

• Sales Tax Rate Chart
• Sales Tax Lookup