How to compute ia-sales-tax for Iowa, tax year 2025: rates, thresholds, and step-by-step rules with primary-source citations.
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General reference only
This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for your personal facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
Source-cited draft. This Guide is source-cited but has not been reviewed by a licensed practitioner. It may be incomplete, outdated, or wrong.
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State sales tax rate
6.00%Iowa Code § 423.2
Local Option Sales Tax (LOST) rate
Up to 1.00% (county voter-approved)Iowa Code § 423B.5
Maximum combined rate (state + LOST)
7.00%Iowa Code § 423.2; Iowa Code § 423B.5
Sourcing method
Destination-based (SST)Iowa Code § 423.15 (Streamlined Sales and Use Tax Agreement)
Economic nexus threshold (gross revenue)
$100,000 in gross revenueIowa Code § 423.14A
Streamlined Sales Tax (SST) membership status
Yes -- Full MemberStreamlined Sales and Use Tax Agreement; Iowa Department of Revenue
General tangible personal property (TPP)
TAXABLE at 6% + LOSTIowa Code § 423.2
Clothing
TAXABLE (no exemption)Iowa Code § 423.2
Grocery food
EXEMPTIowa Code § 423.3(57)
Prepared food
TAXABLEIowa Code § 423.3(57); Iowa Administrative Code 701-18.35
SaaS (Software as a Service)
TAXABLE -- Iowa taxes SaaS and specified digital productsIowa Code § 423.2(6); Iowa Code § 423.1(57) (specified digital products)
Canned (prewritten) software
TAXABLEIowa Code § 423.2(6)
Digital goods (specified)
TAXABLEIowa Code § 423.2(6); Iowa Code § 423.1(57)
Professional services
NOT TAXABLEIowa Code § 423.2 (services enumerated for taxation; professional services not listed)
Manufacturing equipment
EXEMPTIowa Code § 423.3(47)
Prescription drugs
EXEMPTIowa Code § 423.3(39)
Resale purchases
EXEMPTIowa Code § 423.3(4)
Rendered from the facts database. General reference only — confirm with a qualified professional before acting.
Quick reference
| Field | Value |
|---|---|
| Jurisdiction | Iowa |
| State rate | 6.00% |
| Local option (LOST) | Up to 1.00% (county voter-approved) |
| Maximum combined rate | 7.00% |
| Sourcing | Destination-based (SST) |
| Economic nexus | $100,000 in gross revenue |
| Tax authority | Iowa Department of Revenue (IDR) |
| Portal | https://tax.iowa.gov |
| SST member | Yes -- Full Member |
| Skill version | 2.0 |
Transaction pattern library
| Pattern | Taxable? | Notes |
|---|---|---|
| General TPP | TAXABLE 6% + LOST | |
| Clothing | TAXABLE | No exemption |
| Grocery food | EXEMPT | |
| Prepared food | TAXABLE | |
| SaaS | TAXABLE | Iowa taxes SaaS and specified digital products |
| Canned software | TAXABLE | |
| Digital goods (specified) | TAXABLE | |
| Professional services | NOT TAXABLE | |
| Manufacturing equipment | EXEMPT | |
| Prescription drugs | EXEMPT | |
| Resale | EXEMPT |
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This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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Other Iowa computations in the OpenAccountants Tax Library.
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