Iowa sales tax for online sellers: nexus, permit and filing

What is the Iowa sales tax rate?

The state rate is 6%. Most cities and counties have adopted a local option sales tax of 1%, which makes the combined rate 7% for most deliveries; Iowa City joined them from July 1, 2026. Tax is charged at the rate for the delivery address. Iowa taxes many digital products and some services as well as goods.

When does an online seller have to collect in Iowa?

You must collect if you have a physical presence in Iowa, such as staff, an office or inventory, or if your gross revenue from sales into Iowa is $100,000 or more in the current or previous calendar year, whether or not the sales were taxable. There is no transaction-count test. A seller whose Iowa sales are made only through marketplaces that are registered and collecting does not need its own permit for those sales, and those sales are generally not counted towards its own threshold.

How nexus works in general is covered in physical vs economic nexus and economic nexus explained.

What if you sell on Amazon, eBay or Etsy?

Iowa requires marketplace facilitators to collect and remit sales tax on the sales they facilitate, so you do not collect on those orders. Your own website and other direct channels remain your responsibility. See marketplace facilitator laws.

How do you register?

Register online through GovConnectIowa for a sales and use tax permit. There is no fee. Iowa is a member of the Streamlined Sales Tax agreement, so you can also register through the Streamlined system. See Streamlined Sales Tax registration.

What are the steps once you have nexus?

1. Confirm nexus

   Check your presence and your sales into Iowa against its threshold.

2. Register before collecting

   With the Iowa tax agency, as set out above.

3. Set up your store

   Charge the correct combined rate for each delivery address and product.

4. File and pay

   On the schedule Iowa assigns, including zero returns where required.

How are returns filed?

Returns are filed through GovConnectIowa, and one return covers both the state tax and the local option tax. The Department assigns the filing frequency from the tax you collect, generally monthly for active sellers and annually for the smallest, with monthly returns due by the end of the following month.

See how to file a sales tax return.

How does the local option tax work?

It is a 1% tax that cities and the unincorporated parts of counties can adopt by vote. Where it applies, it is added to the 6% state rate on the same sales, and the state collects it on the same return, so there is no separate local registration. Because not every place has adopted it, your store needs to apply the rate by delivery address; the Department publishes the list of jurisdictions and the dates of any changes.

What does an example look like?

An outdoor equipment seller has $140,000 of Iowa sales in a year through its own website. It has passed $100,000, so it registers through GovConnectIowa and collects 7% on an order delivered to Des Moines, where the local option tax applies, and 6% on an order delivered to a place that has not adopted it. Both are reported on one return.

What else should sellers know?

• Sellers outside the US: the same rules apply wherever the business is based. See selling on Amazon US as a non-resident.
• Late registration: tax you should have collected becomes your own debt. See voluntary disclosure agreements and collected but not remitted.
• Records: keep sales by delivery address, tax collected and any certificates. See exemption certificates and sales tax audits.
• Stopping: returns stay due until the account is closed. See filing frequency and cancelling a sales tax permit.
• Store settings: switch on collection only once you are registered. See Shopify sales tax setup.

This guide is general information. It is not tax or legal advice for your situation.