Iowa Sales Tax- A Quick Guide for Businesses

The State Spotlight Series

Iowa State Landscape

The Iowa state sales tax rate is 6% across all of Iowa. However, like many states, there are local rates to be aware of too. You can use our sales tax calculator to find out what rate to charge for anywhere in Iowa.

Economic Nexus?

Yes, just like over thirty other states, Iowa jumped on the chance to increase their revenue from out of state businesses selling in Iowa.
The threshold is $100,000/year in gross revenue OR 200, or more, separate transactions. This counts for the previous or current calendar year.
This law went into effect on January 1, 2019.

Remember: their small seller exemption only exists for those with no physical presence. Any business delivering or installing products in Iowa automatically has ‘presence’ and is required to collect.

Iowa Sales Tax Due Dates:

Important to note for Iowa: if you owe more than $60,000 in sales taxes a year, your business will be required to file twice in a month.

For those that collect more than $6,000 but less than $60,000 a year, you are required to send in a monthly deposit and file a quarterly return. The due dates are typically the 20th of the month, however not all months are the same. You can go here for the most up to date filling times.

In-between $120/year and $6,000 a year? The Iowa Department of Revenue will require you to file on a quarterly basis. These payments and filings are due the last day of the month that follows the end of the quarter. The quarterly due dates are listed below for your convenience:

April 30
July 31
October 31
January 31

For businesses that collect less than $120/year the Iowa sales tax due date is annually, on January 31 of the following year.

Iowa Sales Tax Holiday?

Yes. They have had one in the past and currently there are no plans to discontinue the practice. If that changes, we will keep you informed.

The holiday falls on the first Friday and Saturday in August, and exempts Iowa’s definition of clothing. It does not apply to items that are priced over $100. For more information, click here.

Amazon Fulfillment Center?

Currently, Iowa does not have an Amazon fulfillment center. However, Amazon is adding new fulfillment centers regularly, so this may change. Unexpected inventory movement caused by Amazon can trigger physical nexus in almost every state. You can stay up to date on Amazon warehouse locations, by using our warehouse map.

Weirdest Iowa Sales Tax Law:

  • Free newspapers are considered tax exempt.
  • If you drop your laundry off, or have it dry cleaned that is taxable. However, if you go to a laundromat and wash the items yourself, the sale is exempt from tax.

We’re making our way though all fifty states. Check out our State Spotlight category to see all that we’ve done so far.

Please note: this blog is for informational purposes and should not to be considered, or used in place of, professional advice for your specific situation.

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