State guide · IA
Iowa sales tax and property tax
A state rate with a single one-percent local option, a two-day clothing holiday every August, and a property tax that only reaches part of a home's value.
Facts read on official Iowa pages on · Checked by Radif Partners · How we calculate
- State sales tax
- 6%
- Local sales taxes
- Yes, by address
- Groceries
- Exempt from the state rate
- Clothing
- Taxed like other goods
- Median property tax
- $2,937
- Effective property rate
- 1.29% · #9 of 51
Iowa's sales tax has two possible levels and no more: the 6% state rate, and 7% where voters approved the 1% local option sales tax, known as LOST. LOST can only reach what the state taxes, and there is no local use tax. Food for home is exempt, prescription drugs too, and clothing is taxed except on the first Friday and Saturday of August, when pieces under $100 are free of both state and local tax. Cars skip sales tax entirely: buyers pay a registration fee of $10 plus 5% of the price. For property, the county auditor's rollback means a home is taxed on only part of its assessed value, 44.5345% for the 2025 assessment year. The Census puts the median Iowa bill at $2,937 for a $227,300 home, a ratio of 1.29% and rank 9 of 51. In 2026 the Legislature replaced the old homestead credit with an exemption of 10% of taxable value, between $5,500 and $20,000, starting with bills paid in September 2027.
Total to pay
$106.00
Sales tax $6.00 · 6% of the price
| Price before tax | $100.00 |
| State tax · 6% | $6.00 |
| Local tax · 0% | $0.00 |
| Total | $106.00 |
Rule applied: general state rate. Exact local rate for an address: Iowa rate lookup. How this is calculated.
Sales tax in Iowa
A local option sales tax exists only after a public vote, and once in force it cannot be repealed by another vote until it has run for a year. The rate is always 1%, whether the vote covered a whole county, a city or the unincorporated part of a county, so the combined rate is either 6% or 7%. The Department of Revenue's Tax Mapper tells you which one applies at an address. LOST also brings a 1% local excise on residential gas and electricity, which the state rate exempts.
Several purchases follow their own rule. A $28,000 pickup bought from a dealer or a neighbor pays no sales tax but a new registration fee of $1,410, that is $10 plus 5%. Hotel rooms pay a 5% state hotel and motel tax instead of the 6% sales tax, plus a local hotel tax of up to 7%, and LOST does not apply to them. Short car rentals add a 5% rental excise on top of the sales tax. At the pharmacy, the label decides: ibuprofen filled and labeled by a pharmacist on a prescription is exempt, the same pill off the shelf is taxable.
The clothing holiday is set by law for the first Friday and Saturday of August, which in 2026 fell on August 7 and August 8. It covers each article of clothing or footwear priced under $100, and it removes LOST as well as the state tax, so a $90 pair of running shoes that would cost $6.30 in tax in a LOST area costs nothing extra. Backpacks and school supplies are not part of it.
What the state charges, item by item
| Item | State rate | Local tax | Rule |
|---|---|---|---|
| Most goods | 6% | yes | 6% state sales and use tax on tangible personal property, specified digital products and enumerated services; most jurisdictions add a 1% local option sales tax (LOST). |
| Groceries (food for home) | 0% | no | Food and food ingredients are generally exempt (Iowa Code 423.3(57)); candy, soft drinks and prepared food are taxable. SNAP purchases are exempt. |
| Clothing | 6% | yes | Clothing is taxable except during the annual August holiday (articles under $100). |
| Prescription drugs | 0% | no | |
| Motor vehicles subject to registration | 5% | Exempt from sales tax; instead a fee for new registration of $10 plus 5% of the sales or lease price, also on private-party sales. | |
| Hotel and motel lodging | 5% | State hotel and motel tax of 5% (not 6%), plus a local hotel/motel tax of up to 7%; local option sales tax does not apply. | |
| Short-term car rentals (60 days or less) | 5% | 5% automobile rental excise tax in addition to sales tax and LOST. |
Local sales taxes
Levied by local option sales tax (LOST) approved by voters in counties, cities or unincorporated areas of a county. LOST is 1% where authorized; it cannot apply to anything exempt from state sales tax, and there is no local option use tax. Find the exact combined rate for an address with the official Iowa lookup, then type the local part into the calculator above.
Sales tax holidays in 2026
| Holiday | Dates | What qualifies |
|---|---|---|
| Iowa Sales Tax Holiday | August 7, 2026 to August 8, 2026 | articles of clothing and footwear with a selling price under $100 each; both state sales tax and local option tax are waived |
Held every year on the first Friday and Saturday of August (Iowa Code 423.3(68)); 2026 dates derived from that rule.
Worth knowing about Iowa sales tax
- Cars and trucks are not subject to Iowa sales tax: buyers pay a one-time fee for new registration of $10 plus 5% of the price instead. source
- Local option sales tax is a flat 1% approved by voters; it can be repealed only by another vote and not before it has been in effect for one year. source
- Where a local option tax is in force, a 1% local excise tax also applies to residential gas and electricity, which are exempt from state sales tax. source
- Iowa's clothing holiday is every first Friday and Saturday of August: no state or local tax on clothing and shoes priced under $100 per item. source
- Hotel stays carry a 5% state hotel and motel tax rather than the 6% sales tax, plus up to 7% local hotel tax. source
- Ibuprofen filled and labeled by a pharmacist on a prescription is exempt, but the same pill bought over the counter is taxable. source
Property tax in Iowa
More than 2,000 levying authorities share Iowa's property tax: counties, cities, school districts and others. The local assessor values homes at market value every odd-numbered year, the county auditor applies the levy rates, and the county treasurer collects. Between the assessment and the rate sits the rollback, the assessment limitation that keeps total residential taxable value from growing more than 3% a year statewide. For assessment year 2025 it was 44.5345%, so the Census median home of $227,300 becomes $101,227 of taxable value. The 2026 percentage is certified by November 1.
From assessment year 2026, SF 2472 replaces the old homestead credit, which was the tax on the first $4,850 of value, with an exemption of 10% of the home's taxable value, no less than $5,500 and no more than $20,000. On that median home it would remove $10,123. Owners 65 or older take an extra $6,500 off. Anyone who already had the credit before July 1, 2026 is switched over automatically; new buyers claim it with the local assessor. Disabled veterans can have the whole homestead tax credited, and owners 70 or older under 250% of the poverty level can file for the Property Tax Credit with the county treasurer by June 1.
Timing is unusual. A January 1 assessment produces bills a year and a half later: the first half is due September 30, the second March 31. Disagreements with a value go first to the assessor between April 2 and 25, then to the board of review by April 30. As a rough guide, 1.29% of value on a $300,000 house is about $3,876 a year.
Property tax on a home in Iowa
Typical bill per year
$2,937
| Per month | $245 |
| Median effective rate in Iowa | 1.29% |
| Median bill paid | $2,937 |
Census median ratio; your county, city and school district set the real levy.
| Census figure | Iowa |
|---|---|
| Median home value (owner-occupied) | $227,300 |
| Median real estate taxes paid | $2,937 |
| with a mortgage | $3,113 |
| without a mortgage | $2,702 |
| Effective rate (tax ÷ value) | 1.29% |
| Rank by effective rate (1 = highest) | 9 of 51 |
| Rank by median bill | 26 of 51 |
How the taxable value is set
Residential, commercial and industrial property is assessed at market value (farmland at a statewide productivity value) and reassessed every odd-numbered year. The county auditor then applies an 'assessment limitation' (rollback) that holds statewide growth in residential and agricultural taxable value to 3% a year; for assessment year 2025 the residential limitation was 44.5345% of assessed value. Who levies the tax: local only: more than 2,000 levying authorities (counties, cities, school districts, etc.); the local assessor values property, the county auditor sets levy rates and the county treasurer collects; the Department of Revenue equalizes values and assesses utilities and railroads
Payment calendar: First half due September 30, second half due March 31, for taxes based on the assessment of January 1 of the previous year (an 18-month cycle).
Other property tax relief
- Homestead exemption for claimants 65 or older. Additional $6,500 of taxable value exempt; once allowed, it continues without refiling. source
- Disabled Veteran Homestead Property Tax Credit. Credit equal to the entire tax on the homestead for qualifying disabled veterans, surviving spouses or children; for applications from July 1, 2026 the homestead is limited to one-half acre. source
- Property Tax Credit (elderly and disabled). Income-based credit; claimants 70+ qualify with household income under 250% of the federal poverty level. File with the county treasurer between January 1 and June 1, every year. source
Worth knowing about Iowa property tax
- In 2026 Iowa switched from a homestead credit to a homestead exemption worth 10% of taxable value ($5,500 minimum, $20,000 maximum), starting with taxes paid in September 2027. source
- Iowa homes are taxed on only part of their value: for assessment year 2025 the residential rollback was 44.5345%, so a $300,000 home had a taxable value of $133,603. source
- The property tax cycle takes 18 months: the January 2023 assessment produced bills due in fall 2024 and spring 2025. source
- The rollback limits growth of total statewide residential taxable value to 3% a year; it does not cap an individual home's assessment. source
- Taxpayers can request an informal review from the assessor from April 2 to 25 and protest to the local board of review from April 2 to 30. source
- Commercial and industrial property gets the residential rollback on its first $150,000 of value and 90% above that. source