The Iowa (IA) state sales tax rate is currently 6%, ranking 16th-highest in the U.S. Depending on local municipalities, the total tax rate can be as high as 8%. The average local rate is 0.97%. The average combined tax rate is 6.97%, ranking 27th in the US.

Local taxes do not apply to inter-state transactions.

When a taxable service or sale of tangible personal property is subject to sales tax but occurs outside of Iowa for use in Iowa, it is usually subject to use tax.

In addition to the state tax, most local jurisdictions impose the local option sales tax. The rate is 1%. Within a county, some cities may have the local option tax, some may not.

In Iowa, food products for consumption off the premises of the retailer are exempt from tax. Sales of prepared food are subject to tax. Sales of prescription drugs are exempt from tax. Farm supplies, farm machinery or equipment, and hand tools for use in agricultural, dairy, and livestock production are exempt from sales and / or use tax.

Iowa participates in the Streamlined Sales Tax Project (SSTP).