State Sales Tax Rates

State Sales Tax Rates Iowa State Sales Tax 2014

Iowa Sales Tax 2014
Iowa State Sales Tax for 2014 Maximum Municipal Sales Tax

6.00%

1.00%

What is the Iowa Sales Tax?

The Iowa state sales tax is 6%, with a maximum possible sales tax (including local and municipal sales taxes) of 7%.

Local governments in Iowa are allowed to add a local sales tax of up to 1 percent on top of the IA state sales tax for all qualifying sales in their jurisdiction - so the actual sales tax paid on any purchase in Iowa can be up to 7% depending on location.

Iowa's sales tax includes 1% earmarked for local school districts, and a further 1% added by most cities and counties for local projects. Information on county sales tax rates can be found at the Iowa Department of Revenue's website.

What sales are exempt from the Iowa Sales Tax?

Iowa Sales and Use Tax Rates

Many states set special sales tax rates for certain types of goods like groceries or clothes, and may completely exempt certain transactions from state and local sales taxes. Iowa completely exempts unprepared food and groceries, and prescription drugs from the Iowa state sales tax.

Iowa does not have special sales tax rates for certain types of purchase, a common practice in many states for goods such as food and clothing.While many other states also collect a special (and often higher) sales tax on prepared and restaraunt food, Iowa does not have a specific restaraunt sales tax.

Generally, the Iowa sales tax is collected only from the end consumer, or the end user of the product. Customers buying products in bulk, as a business-to-business transaction, or buying with the intent to resell do not have to pay the Iowa sales tax if they provide the seller with a Iowa Sales Tax Exemption Certificate at the time of purchase. Most states will accept the Uniform Sales and Use Tax Certificate for this purpose, which is available from the Multistate Tax Commission here.

Internet Sales Tax, or tax on purchases made over the internet, is currently a gray area in many states' tax codes. While most states can collect sales tax on internet purchases made within the state (the vendor and consumer are both located in Iowa), taxation of interstate internet transactions is much more complicated.

Currently New York, Rhode Island, North Carolina, Colorado, and Illinois have some form of online sales tax that also handles interstate transactions. For details on how Iowa handles taxation of online sales, read more about online sales taxes in the United States.

Resources:

[1] Table of state sales taxes on Wikipedia
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdiction

[2] Iowa sales tax information on Tax-Rates.org
http://www.tax-rates.org/Iowa/sales-tax

[3] Table of state sales, use, and excise taxes by The Tax Foundation
http://www.taxfoundation.org/taxdata/show/245.html

[4] State level taxation resources on IRS.gov
http://www.irs.gov/businesses/small/article/0,,id=99021,00.html