# Iowa Sales Tax Guide (2026)

Canonical: https://trykintsugi.com/sales-tax-guides/usa/iowa
Published: September 22, 2026

Iowa's 6% state rate usually lands at 7% with local option tax, and SaaS is taxable. Economic nexus starts at $100,000.

- **SaaS:** Taxable
- **Clothing:** Taxable
- **Groceries:** Exempt
- **Digital Goods:** Taxable

- **Effective date::** 
- **Scheduled change::** 

## Key Takeaways

Iowa's state sales tax rate is 6%, plus a 1% local option tax in most jurisdictions, for a combined rate up to 7% [1]. You have economic nexus once gross revenue from Iowa sales reaches $100,000 in the current or prior calendar year, with no transaction-count trigger [2]. Iowa taxes SaaS as an enumerated taxable service, though it exempts SaaS sold to a commercial enterprise for business use; unprepared food is exempt and other digital products are taxable [3][4]. Protest an assessment within 60 days [6].

## Taxability Snapshot

## Sales Tax Rates

Iowa levies a 6% state sales and use tax. Most jurisdictions add a 1% local option sales tax, so the combined rate is 7% across most of the state.

| Component | Rate | Scope |
| --- | --- | --- |
| State | 6.00% | Statewide |
| Local option | up to 1.00% | Most jurisdictions |
| Combined | 6.00%–7.00% | Varies by location |

Combined rates in major Iowa cities (2026):

| City | Combined rate |
| --- | --- |
| Des Moines | 7.00% |
| Cedar Rapids | 7.00% |
| Davenport | 7.00% |
| Sioux City | 7.00% |
| Iowa City | 7.00% |

To find the combined rate for a specific address, use our [US sales tax calculator](/us-sales-tax-calculator).

## Registration or Nexus Threshold

Iowa economic nexus applies once your gross revenue from sales into the state reaches $100,000 in the current or prior calendar year, whether or not any of it was taxable. There is no transaction-count trigger. Physical presence creates nexus immediately.

## Marketplace Facilitator Law

Iowa requires marketplace facilitators that meet economic nexus to register with the Department of Revenue and collect Iowa sales tax and applicable local option sales tax (LOST) on taxable retail sales sourced to Iowa, under Iowa Code § 423.14A and Iowa Administrative Code 701—207. The $100,000 gross-revenue threshold is measured by combining the facilitator's own direct Iowa sales with the sales it facilitates for marketplace sellers, and once met, the facilitator must collect on all taxable Iowa sales made through its marketplace regardless of whether an individual marketplace seller would otherwise have nexus. A remote seller that meets Iowa's sales threshold but sells into Iowa only through marketplace facilitators that are registered and collecting Iowa sales tax and LOST does not have to separately register, collect, or file an Iowa sales tax return on those facilitated sales, and generally does not need an Iowa sales tax permit for them.[9]

## Filing Frequency & Deadlines

Iowa assigns monthly or annual filing based on tax volume. Returns are due the last day of the month following the reporting period. Sellers collecting less than $1,200 per year file a single annual return due January 31.

#### Exemptions

Iowa exempts groceries and prescription drugs. Iowa taxes SaaS as an enumerated taxable service, so SaaS is subject to the 6% state rate plus any local option tax.

## Resale & Exemption Certificates

Iowa buyers give the seller the Iowa Sales/Use/Excise Tax Exemption Certificate (Form 31-014) to buy for resale or another exempt use [5]. For repeated purchases from the same seller, an updated certificate should be provided at least every three years [5].

## Penalties

Late filing carries a 5% penalty and late payment a further 5% of the tax due, plus interest from the due date.

## Audits & Appeals

You must file a protest within 60 days of the date on a Notice of Assessment or a refund denial [6]. A protest filed with the Department can proceed to a contested-case hearing before an administrative law judge [6].

## Sources

- [1] [Iowa DOR — Local Option Sales Tax (state 6% + 1% LOST)](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/local-option-sales-tax-lost)

- [2] [Iowa DOR — Remote Sellers and Marketplace Facilitators (economic nexus)](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/remote-sellers-marketplace-facilitators)

- [3] [Iowa DOR — Specified Digital Products and Software (SaaS taxable, business-use exemption)](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/taxation-specified-digital-products-software-and-related-services)

- [4] [Iowa DOR — Sales Tax on Food (groceries exempt)](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/iowa-sales-tax-food)

- [5] [Iowa DOR — Sales/Use/Excise Tax Exemption Certificate (Form 31-014)](https://tax.iowa.gov/forms/iowa-salesuseexcise-tax-exemption-certificate-31-014)

- [6] [Iowa DOR — Taxpayer Bill of Rights (60-day protest)](https://revenue.iowa.gov/resources/taxpayer-bill-rights)

- [7] [Iowa DOR — Annual Sales Tax Holiday](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/iowas-annual-sales-tax-holiday)

- [8] [Iowa DOR — Business Permit Registration (GovConnectIowa)](https://revenue.iowa.gov/permits-licensing/business-permit-registration)

- [9] [Iowa Administrative Code Rule 701—207 — Marketplace Facilitators](https://www.legis.iowa.gov/docs/iac/chapter/04-29-2026.701.207.pdf)

Verified July 2026 against Iowa Department of Revenue published guidance.

## Frequently Asked Questions

### What is the Iowa sales tax rate in 2026?

6% state, and most areas add a 1% local option tax for a 7% combined rate.

### What is Iowa's economic nexus threshold?

$100,000 in gross revenue into Iowa in the current or prior calendar year, taxable or not. There is no transaction-count trigger.

### Is SaaS taxable in Iowa?

Yes. Iowa taxes SaaS as an enumerated taxable service, subject to the 6% state rate plus local option tax.

### Are groceries taxed in Iowa?

No. Groceries and prescription drugs are exempt from Iowa sales tax.

### When are Iowa sales tax returns due?

The last day of the month following the reporting period; small annual filers file by January 31.

### What is the penalty for late Iowa sales tax?

5% for late filing plus a further 5% for late payment, plus interest.

## Related Reading

- [Does Iowa Have Sales Tax on Clothing? A Guide for Businesses](/blog/does-iowa-have-sales-tax-on-clothing)

- [A Comprehensive Guide to Managing Iowa Sales Tax: E-filing and Payment Options](/blog/file-a-sales-tax-return-in-iowa)

- [How to File a Sales Tax Return in Iowa](/blog/how-to-file-sales-tax-return-in-iowa)

## US Sales Tax Calculator