State of Iowa Sales Tax The 2016 Iowa State Sales Tax

1.1 -
What is the 2016 Iowa Sales Tax Rate?

Iowa Sales Tax Rate

6.00%

2016 Iowa state sales tax
Exact tax amount may vary for different items

The Iowa state sales tax rate is 6%, and the average IA sales tax after local surtaxes is 6.78%.

  • Groceries and prescription drugs are exempt from the Iowa sales tax
  • Counties and cities can charge an additional local sales tax of up to 1%, for a maximum possible combined sales tax of 7%
  • Iowa has 893 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
  • Iowa has a higher state sales tax than 51.9% of states

Counties and cities in Iowa are allowed to charge an additional local sales tax on top of the Iowa state sales tax. 1% of the Iowa sales tax is allocated directly for local school districts, and most counties add a local surtax of 1%. Some services are also subject to the Iowa sales tax.

If you are a Iowa business owner, you can learn more about how to collect and file your Iowa sales tax return at the 2016 Iowa Sales Tax Handbook .

1.2 -
Iowa Sales Tax Exemptions

Iowa doesn't collect sales tax on purchases of most prescription drugs and groceries. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.

Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Iowa does not treat candy or soda as groceries, which means they are not subject to reduced grocery sales tax rates. Other items including gasoline, alcohol, and cigarettes are subject to various Iowa excise taxes in addition to the sales tax.

Iowa has one sales tax holidays, during which certain items can be purchased sales-tax free. For more details, see the Iowa sales tax holiday calendar.

In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. The IA sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Iowa's sales tax rates for commonly exempted items are as follows:

Groceries: EXEMPT Clothing: 6% Prepared Food: 6% Prescription Drugs: EXEMPT Non-Prescription Drugs: 6%
Iowa sales tax for a restaurant meal
$100 Restaurant Dinner
Iowa sales tax for groceries
$100 of groceries
Iowa sales tax for clothing
$100 in clothes
Iowa sales tax for general consumer products
$100 of consumer products
$6.00 sales tax
$106.00 total
$0.00 sales tax
$100.00 total
$6.00 sales tax
$106.00 total
$6.00 sales tax
$106.00 total

1.3 -
Iowa Sales Tax Exemption Certificate

Unlike a Value Added Tax (VAT), the Iowa sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Iowa Sales Tax Exemption Form to buy these goods tax-free.

Companies or individuals who wish to make a qualifying purchase tax-free must have a Iowa state sales tax exemption certificate, which can be obtained from the Iowa Department of Revenue . On making an exempt purchase, Exemption Certificate holders may submit a completed Iowa Sales Tax Exemption Form to the vendor instead of paying sales tax.

Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Iowa sales tax code) can be downloaded from the Iowa Department of Revenue here .

1.4 -
Iowa Sales Tax Calculator

 Sales Tax Calculator
Purchase Details:
$ in zip code Enter the zip code where the purchase was made for local sales tax

Whenever you make a purchase at a licensed Iowa retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Iowa sales tax calculator.

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Iowa Use Tax [View Main Article]

If you buy goods and are not charged the Iowa Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 6% sales tax (less any foreign sales tax paid) for these items yourself as the Iowa Use Tax.

Your are expected to voluntarily list your liable purchases on a Iowa Use Tax Return, which should be attached with payment to your Iowa Income Tax Return. Historically, compliance rates with with the Iowa Use Tax have been low.

1.6 -
Iowa Local Sales Taxes

Iowa does not allow local jurisdictions like cities or counties to collect a local sales tax. The Iowa state sales tax of 6% is applicable statewide. You can view the sales tax rates for various cities in Iowa here.


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