The Iowa state sales tax rate is 6%. Food 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%.
- If shipping is stated separately on the bill, it is not taxable in Iowa.
- However, if shipping is included in the price of the item, it is subject to the sales tax.
- All car sales in Iowa are subject to a 6% sales tax at the state level and up to 1% sales tax for county and local rates.
- The combined average sales tax on a car purchase in Iowa is 5.988%.
- Businesses in Iowa are not required to collect sales tax on the sale of digital products, with one exception – they must collect sales tax on pre-written computer software offered online.
Frequently Asked Questions
Is grocery food taxed in Iowa?
Food and prescription drugs are exempt. Counties and cities can charge up to 1% additional local sales tax, for a maximum 7% combined rate.
Do you pay taxes when you buy groceries?
No. Food and prescription drugs are exempt from the Iowa sales tax.