The Ultimate Iowa Sales Tax Guide

With different local sales tax rates and complex state regulations, Iowa’s sales tax rules can be challenging to navigate.

This guide covers the essentials, including what creates nexus and how to collect and remit sales tax properly. We’ll also introduce a reliable solution to simplify sales tax compliance in Iowa and across other states.

Iowa Sales Tax Rate 2025

Iowa applies a 6% state sales tax to most goods and services. Some municipalities can also impose a 1% local option tax.

Collecting Iowa Sales Tax from Customers

Here’s what you should know about charging and collecting sales tax in Iowa:

Do I Have to Collect Iowa Sales Tax from Customers?

If your business sells taxable tangible personal property, you must collect sales tax unless the sale qualifies for an exemption.

What Creates Sales Tax Nexus in Iowa?

The following conditions can create a sales tax nexus in Iowa: 

• Physical nexus: Businesses that own or maintain an office, distribution house, warehouse, or other place of business either directly or by subsidiary in the state.
• Employees: Businesses that carry out the solicitation of tangible personal property sales via employees, brokers, contractors, agents, or other representatives.

• Delivery: Businesses that conduct delivery using their own vehicles in the state.
• Services: Businesses that perform taxable services in Iowa. 
• Economic nexus: Remote sellers with $100,000 or more in gross revenue in Iowa during the current or previous calendar year.

Learn more about sales tax nexus and when you’re required to collect sales tax.

Do I Have to Collect Sales Tax from Iowa Customers if I Sell on Amazon, Walmart, eBay, or Etsy?

No. 

Iowa has a marketplace facilitator law that requires platforms like Amazon to collect sales tax from third-party sellers on their platforms. However, sellers with annual sales under the $100,000 threshold are not required to collect or remit sales tax in Iowa.

Taxable Products in Iowa

Here’s a breakdown of what’s taxable in Iowa:

Are Groceries Taxable in Iowa? 

Iowa doesn’t tax grocery items, like cooking ingredients or food for domestic home consumption.

Are Digital Products Taxable in Iowa?

Specified digital products like digital audiobooks, ebooks, and movies are taxable in the state.

Is Software-as-a-Service (SaaS) Taxable in Iowa?

Yes, all types of pre-written computer software, such as software delivered or accessed in physical form or electronically, are subject to sales tax in Iowa.

Are Services Taxable in Iowa?

In Iowa, services, like beauty services and boat repair, are only subject to sales tax if they are specifically listed under state law.

Tax-Exempt Items

Some items that are sales tax exempt in Iowa are: 

• Sales of food for human consumption, like fish, frozen food, coffee, and more
• Sales of chemicals and fertilizers for direct use in agricultural production 
• Sales of food for livestock and domesticated fowl
• Sales of specified medical equipment, like nebulizers, and prescription medicines, such as aspirin

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How to Register for an Iowa Sales Tax Permit

You can register online at the Iowa official website.

Learn how to obtain a seller's permit in every US state.

Do I Need an Iowa Sales Tax License if I’m Only a Wholesaler? 

Yes, you need a state tax permit even if you’re a wholesaler. 

How to Collect Sales Tax in Iowa

Iowa follows destination-based sales tax sourcing for in-state or out-of-state sales. This means you must charge the sales tax rate that applies to the buyer’s shipping address when selling to an Iowa resident.

How to File and Pay Sales Tax in Iowa

There are multiple ways to file and pay Iowa sales tax:

• Automated: Let Zamp handle your Iowa sales tax filing and remittance, so you won’t have to deal with sales tax returns ever again.
• File online: Pay online at the official Iowa Website.

Explore how you can file and pay sales tax in other US states.

FAQs on Paying and Filing Iowa Sales Tax

What Is Use Tax?

Use tax applies to goods and services when sales tax wasn’t collected, often from out-of-state suppliers. Normally, retailers collect it, but if they aren’t required (no physical presence or under $100,000 in Iowa sales) or fail to do so, the purchaser must remit use tax once they buy the taxable item.

How Often Do I Need to File and Pay Sales Tax in Iowa?

You must file and pay sales tax based on the amount you collect:

• Annual: Less than $1,200 in sales and use tax a year
• Seasonal: $1,200 or more in sales and use tax in four or fewer months per year
• Monthly: $1,200 or more in sales and use tax per year

Iowa Sales Tax Due Dates

Iowa monthly sales tax filing due dates are:

Iowa annual sales tax filing due dates are:

Let The Experts Handle Your Iowa Sales Tax Filing

Sales tax compliance can be complex, time-consuming, and prone to errors.

That’s why you need Zamp. With instant rate calculations, quick setup, and simple one-click registration and filing, we take care of the hard work for you.

Start with Zamp, and we’ll help you stay compliant while saving you valuable time.

About the author

The Zamp Team

The Zamp Team consists of experienced writers and editors who are dedicated to researching sales tax topics to help readers make smart decisions about their business and sales tax compliance. Collectively, the team has over 300 years of sales tax experience.