Iowa Tax / Fee Descriptions and Rates

Iowa Automobile Rental Tax

Description: This is an excise tax imposed on the rental of passenger vehicles designed to carry nine or fewer passengers that are rented for a period of 60 days or less. The tax is not imposed on delivery trucks, motorcycles, and motorized bicycles.

Tax Rate: 5% tax on the rental charge for certain vehicles. This is in addition to the state sales / use tax and local option tax, if any.

Distribution of Funds: Road Use Tax Fund

Due Date(s) of Returns: This excise tax is reported and remitted on a quarterly basis electronically through eFile & Pay. No permit other than an Iowa sales or use tax permit is required to collect this tax.

Iowa Cigarette Tax

Description: The tax is imposed on the sale of cigarettes and must be paid by the person making the first sale in Iowa. A stamp affixed to each cigarette package is proof that tax was paid.

Tax Rate: $1.36 per package of 20; $1.70 per package of 25

Distribution of Funds: State General Fund and the Health Care Trust Fund

Due Date(s) of Returns: Tax returns must be filed by the holder of a state or manufacturer’s permit by the 10th day of each month for the preceding calendar month.

See cigarette / tobacco page for more information and forms.

Iowa Consumer's Use Tax

Description: Persons regularly purchasing taxable goods or services for their own use in Iowa from an out-of-state source not collecting Iowa tax must register with the Department to remit consumer’s use tax. A physical permit is not issued, although a consumer’s use tax number is assigned.

Tax Rate: The consumer's use tax rate through June 30, 2008, was 5%. Beginning July 1, 2008, the rate is 6%.

Due Date(s) of Returns: Depending on the amount of tax collected, returns are due annually or quarterly. They are filed through eFile & Pay.

It is important to file and pay the returns and tax due by the due date to avoid penalty and interest. A return should be filed with zeros if a permit holder does not have purchases to report.

Filing Status Information

Consumer's use tax information

Iowa Contractor Registration Fee

This fee is administered by Iowa Workforce Development (IWD). Construction contractors are required by Iowa law to register every year with IWD. Conditions for registration include compliance with workers' compensation law and an unemployment insurance (FUTA) employer account number. The registration fee is $50. Most out-of-state construction contractors working in Iowa will be required to file a bond with IWD.

For more information, call 1.800.562.4692 or visit IWD's Web site.

Iowa Corporate Income Tax

Description: The tax is imposed on the Iowa net income of corporations doing business within this state or receiving income from property in the state. For tax years on or after January 1, 1987, Iowa imposes an alternative minimum tax equal to 7.2% of Iowa tax preferences. For tax years on or after January 1, 1988, the tax is imposed on the unrelated business income of nonprofit corporations.

Tax Rate: 6% on first $25,000; 8% on next $75,000; 10% on next $150,000; 12% on all over $250,000

Distribution of Funds: State General Fund

Due Date(s) of Returns: Corporation tax returns must be filed by the last day of the 4th month after the close of the tax year. Cooperatives must file a return on or before the 15th day of the 9th month following the close of the cooperative’s tax year. Estimated tax payments are due from most corporations on a quarterly basis. Nonprofit corporation returns with unrelated business income are due on the 15th day of the 5th month following the close of the tax year.

Corporation forms

Iowa Corporation Registration

Corporations must register and pay an annual fee with the Iowa Secretary of State (ISS). For more information, call 515.281.5204 or visit ISS' Web site.

Iowa Drug Stamp Tax

Description: Tax is imposed on dealers in possession of specified quantities of marijuana and other controlled substances. See Drug Stamp Tax Law for details.

How to obtain stamps:

Tax Rate: $5 / gram of processed marijuana; $750 / unprocessed marijuana plant; $250 / gram of other taxable substances; $400 / 10 doses if not sold by weight

Distribution of Funds: State General Fund

Due Date(s) of Returns: Tax payment is required upon possession. The drug tax stamp must be permanently affixed to the substance as proof the tax was paid.

Iowa Environmental Protection Charge

Description: The EPC is imposed on all deposits of petroleum products into non-exempt underground and non-exempt aboveground storage tanks in Iowa.

Tax Rate: 1¢ per gallon of petroleum products deposited in qualifying tanks

Distribution of Funds: Iowa Comprehensive Petroleum Underground Storage Tank Fund

Due Date(s) of Returns: EPC returns must be postmarked by the last day of the month following the close of each quarter. See EPC form (pdf) and booklet.

Iowa Franchise Tax

Description: Tax is imposed on the income of state banks, national banking associations, trust companies, federally and state chartered savings and loan associations, financial institutions chartered by the Federal Home Loan Bank Board and production credit associations. For tax years on or after January 1, 1987, Iowa imposes an alternative minimum tax equal to 3% of Iowa tax preferences.

Tax Rate: 5% of taxable income

Distribution of Funds: State General Fund. $7 million is appropriated annually to the community attraction and tourism fund.

Due Date(s) of Returns: Franchise tax returns must be filed by the last day of the 4th month after the close of the tax year. Estimated payments are due from most financial institutions on a quarterly basis. Financial institutions which have elected S corporation status are still subject to the franchise tax, and the shareholders are allowed a tax credit against their individual income tax for their share of the franchise tax paid.

Franchise forms

Iowa Gambling, Social and Charitable

The Social and Charitable Gambling Unit of the Iowa Department of Inspections and Appeals has administrative control for amusement games, contests, casino nights, and commercial promotions operated in the state. In addition, the unit regulates and licenses all games of skill and chance, bingo operations, raffles, and social gambling activities.

Tax information is available in the Iowa Department of Revenue gambling brochure.

Local Hotel / Motel Tax

Description: Local hotel / motel tax is imposed on the gross receipts from the renting of sleeping rooms for 31 consecutive days or less. Contracts for periods of more than 31 consecutive days are exempt. To qualify, the renter must contract to rent for a single period of more than 31 days and cannot accumulate these days.

Tax Rate: May not exceed 7%. This is in addition to the state tax rate of 5%. The state rate for hotels and motels did not increase to 6% on July 1, 2008. Local option tax, if any, does not apply.

Distribution of Funds: The local government imposing the tax

Due Date(s) of Returns: Local hotel / motel tax is reported with quarterly sales tax returns through eFile & Pay. They are due the last day of the month following the end of each calendar quarter.

Rates and answers to frequently-asked questions are available on our hotel / motel information page.

Iowa Household Hazardous Materials (HHM)

Businesses selling household hazardous materials can register to do so on the Iowa Department of Revenue online Business Registration form.

This permit must be obtained for each location selling household hazardous materials on a retail basis. Manufacturers and distributors that have independent agents selling door-to-door may purchase one permit fee of $25 for the first $3 million in sales of these materials. An additional $100 fee is charged for each subsequent increment of $3 million in sales. Fees are not prorated or refunded and must be renewed annually on July 1.

More information is available in the Iowa Department of Natural Resources HHM brochure.

Iowa Hazardous Waste Fee

This fee is sometimes confused with the Household Hazardous Materials Permit Fee. The Hazardous Waste Fee is for the generation, treatment, storage, disposal and transportation of waste that is hazardous.

Businesses that are assigned a hazardous waste identification number from the US Environmental Protection Agency (EPA) will receive a Hazardous Waste Fee form from the Iowa Department of Natural Resources (IDNR), which administers the fee.

More information may be found on this page of the IDNR Web site or call IDNR at 515.281.5918.

Iowa Individual Income Tax

Description: Tax is imposed on Iowa net income of individuals and estates and trusts.

Exemption for persons age 65 or older:

Tax Rate Schedules, forms, and instructions are available on our income tax forms page.

Distribution of Funds: State General Fund

Due Date(s) of Returns: The final return and any tax owing is due by the last day of the fourth month following the close of the tax year. Individuals may be required to remit estimated tax payments quarterly.

Income tax is also collected through withholding tax. Depending on the amount of tax withheld, withholding tax deposits are due annually, quarterly, monthly, or semi-monthly.

Individual income tax forms

Iowa Income School District Surtax

Description: Upon voter approval, school districts may initiate educational improvement programs where school boards may raise an additional portion of the state cost per pupil. This enrichment amount is raised through a surtax and through an accompanying property tax.

Tax Rate: Not to exceed 20% of state income tax liability. The rate is different for each school district. Lists are available on our income tax forms page.

Distribution of Funds: Local school district imposing the tax

Due Date(s) of Returns: Tax is collected with the individual income tax return. Returns are due the last day of the fourth month following the end of the tax year.

Individual income tax forms

Iowa Income Emergency Medical Services Surtax

Description: A county may impose the surtax by ordinance at the rate set by the board of supervisors not to exceed 1%.

Tax Rate: Up to 1% of state income tax liability. Only Appanoose County imposes this tax (at a rate of 1%) at this time.

Distribution of Funds: County imposing the tax

Due Date(s) of Returns: Tax is collected with the individual income tax return. Returns are due the last day of the fourth month following the end of the tax year.

Individual income tax forms

Iowa Inheritance and Estate Taxes

Description: These taxes are imposed on any person who becomes beneficially entitled to any property or interest by any method of transfer. A surviving spouse, decedent's lineal ascendants, descendants, and stepchildren are exempt from the inheritance tax. Administrators, executors, referees, and trustees of taxable estate transfers may also be liable for such taxes.

Tax Rate:
Inheritance Tax: From 1% to 15% depending on the amount of the inheritance and the relationship of the recipient to the decedent.
Estate Tax: Prior to July 1, 2008 -- Amount by which the allowable federal credit for state death taxes exceeds the inheritance tax due from the estate. On and after July 1, 2008 -- Iowa's estate tax was repealed effective July 1, 2008.

Distribution of Funds: State General Fund

Due Date(s) of Returns: In most instances, the return must be filed and tax paid on or before the last day of the ninth month after the death of the decedent.

Inheritance tax forms

Iowa Insurance Premium Tax

Description: This tax is administered by the Iowa Department of Commerce, with the Iowa Department of Revenue serving as a depositing agency for the tax receipts. The tax is imposed on the premiums of every insurance company except fraternal beneficiary associations.

Questions about the tax should be directed to the Iowa Department of Commerce, Insurance Division, at 515.242.5178.

Iowa Insurance Division Web site

Iowa Liquor Taxes

The Iowa Alcoholic Beverages Division of the Iowa Department of Commerce is responsible for the regulation and control of alcohol in the State of Iowa.

Iowa Local Option Sales Tax

Description: Tax is imposed by counties either countywide or in incorporated or unincorporated areas. Under very special circumstances it may also be imposed by a city. With a few exceptions, it is imposed on sales and services taxed under state sales tax provisions. There is no corresponding local option use tax, except for transactions involving natural gas, natural gas services, electricity, or electric service.

Local option sales tax information

Tax Rate: Not more than 1%.

Distribution of Funds: To local sales and service tax fund with disbursement to local jurisdictions monthly

Due Date(s) of Returns: Local option sales tax is due at the same time as the state sales tax and is filed through eFile & Pay.

Iowa Mobile, Manufactured, and Modular Home Tax

Description: A square footage tax is imposed on homes located in mobile home parks and manufactured home communities. Homes located outside of mobile home parks and manufactured home communities are assessed and taxed as real estate.

Tax Rate: 20¢ per square foot if the home is located in a mobile home park or manufactured home community. The tax decreases when the home is more than five years old to 18¢, and again when the home is more than nine years old to 16¢. If the home is located outside a mobile home park or manufactured home community, the levy rate applicable to real estate.

Distribution of Funds: Collected by the county treasurer and distributed in the same manner as property taxes.

Iowa Motor Fuel Tax

Description: Tax is imposed on each gallon of fuel sold in Iowa for use in motor vehicles or aircraft. Motor vehicle fuel includes gasoline, diesel fuel, liquefied petroleum gas, compressed natural gas, aviation fuel, and ethanol blended gasoline.

Tax Rates:

Gasoline:

July 1, 2002, through June 30, 2003 - 20.1¢/gal
July 1, 2003, through June 30, 2004 - 20.3¢/gal
July 1, 2004, through June 30, 2005 - 20.5¢/gal
July 1, 2005, through June 30, 2006 - 20.7¢/gal
July 1, 2006, through June 30, 2007 - 21.0¢/gal
July 1, 2007, through June 30, 2008 - 20.7¢/gal
Effective July 1, 2008 - 21.0¢/gal

Ethanol Blended Gasoline:

19¢/gal

E85:

January 1, 2006, through June 30, 2007 - 17¢/gal
Effective July 1, 2007 - 19¢/gal

Other:

Aviation Gasoline: 8¢/gal
Special Fuel (diesel): 22.5¢/gal
Special Fuel (LPG): 20¢/gal.;
Special Fuel (aviation jet): 3¢/gal.;
Compressed Natural Gas: 16¢/100 cubic feet.;
LNG: 22.5¢/gal

Distribution of Funds: Road Use Tax Fund. Aviation fuel tax receipts are deposited in the state aviation fund. Watercraft fuel tax receipts are deposited in the marine fuel tax fund.

Due Date(s) of Returns: Tax returns are required to be filed by the licensee no later than the last day of the month following the month in which the fuel was withdrawn from the terminal or, in the case of LPG or CNG, placed into the fuel supply tank of a motor vehicle. Importers are required to file semimonthly.

Motor fuel forms

Iowa One-Time Registration Fee (formerly called Motor Vehicle Use/Lease Tax)

Description: The sales or lease price of vehicles subject to registration is exempt from sales tax. These vehicles are subject to a one-time registration fee equal to 5% of the sales or lease price. This one-time registration fee also applies when vehicles are sold between private individuals.

One-Time Registration Fee: 5% of the sales or lease price

Distribution of Funds: Road Use Tax Fund

Motor vehicle one-time registration fee exemption information and worksheets

Iowa Ocean Marine Profit Tax

This tax is administered by the Iowa Department of Commerce (IDC), Insurance Division. For more information, contact IDC at 515.281.5707 or visit IDC's Insurance Division Web site.

Iowa Property Tax

Description: Property tax is levied on the taxable value of real property. The taxable value may be a percentage of the assessed value as a result of statewide limitations for allowable growth. The assessed value is 100% of market value except for agricultural realty, which is assessed according to its productivity.

Property tax booklet

Tax Rate: Differs in each locality and is a composite of county, city, school district, and special levies. Taxes are levied in terms of dollars per $1,000 of taxable value and are collected locally.

Distribution of Funds: Local jurisdictions

Due Date(s) of Returns: The tax may be paid in two installments, the first of which becomes delinquent on October 1 and the second of which becomes delinquent on April 1.

Iowa Real Estate Transfer Tax

Description: The tax is imposed on the total amount paid for the property. The tax is paid to the county recorder in the county where the real property is located.

Tax Rate: The calculation is based on $.80 per each increment of $500, with the first $500 being excepted from tax.  Example:

Purchase Price of $2,600
$2,600 - $500 = $2,100
$2,100 / $500 = 4.2 (Because there is a remainder of .2, we would go to the next multiplier.  The tax is on each increment of $500.)
5 x $.80 = $4.00 of transfer tax

Distribution of Funds: 17.25% of the tax receipts are retained by the county. Of the remaining 82.75%, 90% goes in the State General Fund, 5% in the Housing Trust Fund, and 5% in the Shelter Assistance Fund

Due Date(s) of Returns: Tax is payable when the deed or other instrument conveying the real property is presented for recording. Tax returns must be filed by the county recorder with the State Treasurer by the 10th day of each month for tax collected during the preceding month.

County Recorder's Monthly Report

Iowa Retailer's Use Tax

Description: Every out-of-state retailer who has “nexus” in Iowa and makes sales of tangible personal property or taxable services in Iowa must obtain a retailer’s use tax permit.

Tax Rate: The retailer's use tax rate through June 30, 2008, was 5%. Beginning July 1, 2008, the rate is 6%.

Due Date(s) of Returns: Depending on the amount of tax collected, a return is due annually, quarterly, or monthly. They are filed through eFile & Pay.

It is important to file and pay the returns and tax due by the due date to avoid penalty and interest. A return should be filed with zeros if a business does not have sales to report.

Filing Status Information

Iowa School Infrastructure Local Option Sales Tax

Beginning July 1, 2008, school local option tax (SILO) no longer exists as a separate tax.

Description: Tax was imposed countywide. With a few exceptions, it was imposed on sales and services taxed under state sales tax provisions. There was no corresponding use tax. This was in addition to the state rate of 5%.

Local option sales tax information

Tax Rate: Not more than 1%.

Distribution of Funds: To local sales and service tax fund with disbursement to local school districts monthly.

Due Date(s) of Returns: Local option sales tax is due at the same time as the state sales tax. Both are filed through eFile & Pay.

Iowa State Sales Tax

Description: The tax is imposed on gross receipts from sales of taxable tangible personal property and taxable (enumerated) services. Exceptions include the sales of certain foods, prescription drugs, medical devices, and farm and industrial machinery, equipment, and computers.

Sales and use tax information

Tax Rate: 5% through June 30, 2008. 6% beginning July 1, 2008.

Distribution of Funds: State General Fund

Due Date(s) of Returns: Depending on the amount of tax collected, a deposit and returns are due annually, quarterly, monthly, or semi-monthly. They are filed through eFile & Pay.

Filing Status Information

Iowa Tobacco Products Tax

Description: Tax is imposed on the sale of all tobacco products except cigarettes and little cigars, which are taxed differently.

Tax Rates: 50% of the wholesale sales price, except snuff which is taxed at $1.19 per ounce, and a limitation of the tax on cigars not exceed 50¢ per cigar.

Distribution of Funds: State General Fund and the Health Care Trust Fund

Due Date(s) of Returns: Distributors or certain consumers are required to file tax returns by the 20th day of each month for the preceding calendar month.

Cigarette/tobacco forms

Iowa Unemployment Taxes

Unemployment taxes are administered by Iowa Workforce Development (IWD). For more information, call 515.281.4199 or visit IWD's Web site.

Iowa Use Tax

Description: Use tax includes:

Tax Rate: 5% through June 30, 2008. 6% beginning July 1, 2008.

Distribution of Funds: State General Fund

Due Date(s) of Returns: On or before the last day of the month following the close of the calendar quarter. Retailer's use tax permit holders collecting more than $1,500 per month are required to file on a monthly basis. Retailer's use tax is filed through eFile & Pay.

Filing Status Information

Iowa Withholding Tax

Description: Every employer who maintains an office or transacts business in Iowa and who is required to withhold federal income tax on any compensation paid to employees for services performed in Iowa is required to withhold Iowa individual income tax from that compensation.

Tax Rate: The amount withheld is calculated using the Iowa withholding tables, formulas, or percentages.

Due Date(s) of Returns: Depending on the amount of tax collected, a return is due quarterly, monthly, or semi-monthly. They are filed through eFile & Pay.

It is important to file and pay the returns and tax due by the due date to avoid penalty and interest. A return should be filed with zeros if an employer does not have withholding to report.

Filing Status Information