Businesses that collect Iowa sales tax register with the Iowa Department of Revenue for a free Iowa Sales and Use Tax Permit. You can apply online through GovConnectIowa, and the permit doesn't expire. Remote sellers need one once their Iowa sales reach $100,000 in the current or prior calendar year, counting exempt, wholesale, and marketplace sales.
You need an Iowa Sales and Use Tax Permit before you make taxable sales of goods, specified digital products, or services in Iowa. That covers retailers with a physical presence in Iowa, remote sellers that reach the economic nexus threshold, and marketplace facilitators.
There is sales tax on most SaaS in Iowa, which is on the state's list of taxable services. However, SaaS bought and used only by a commercial enterprise is exempt.
Businesses that never make taxable retail sales don't need a permit. This includes sellers of only exempt products and businesses that make only wholesale or resale sales.
If you have no physical presence in Iowa, you need a permit once you reach the Iowa economic nexus threshold: $100,000 or more in gross revenue from Iowa sales in the current or prior calendar year. Iowa has no transaction-count threshold.
Iowa counts all revenue from Iowa sales, not only taxable sales:
If you have several locations, all outside Iowa, add up Iowa sales from all of them. You need only one permit for the business, not one per location.
You must start collecting on the first day of the next calendar month that starts at least 30 days after you cross $100,000, and register before that date. You then collect sales tax through the end of that year and all of the next year.
If your Iowa sales stay under $100,000 for all of that next year, you can cancel your permit and stop collecting the year after.
For example, if you cross the threshold on May 15, you need a permit and must start collecting by July 1. You keep collecting through Dec. 31 of the following year.
Iowa law also requires these sellers to collect Iowa sales tax, even if sales are below $100,000. They need a permit if they make taxable Iowa sales:
Anyone who sells taxable items to an Iowa state agency needs a permit before the sale.
Iowa is a full member of the Streamlined Sales Tax Agreement. You can register for Iowa and other member states at the same time through the Streamlined Sales Tax Registration System, or directly with the Iowa Department of Revenue (IDR) through GovConnectIowa.
No returns are filed through the Streamlined system. Registrants file with each state through that state's own online filing system.
A voluntary disclosure agreement can help you settle back taxes, penalties, and interest. IDR's Voluntary Disclosure Program isn't open to businesses already under audit or contacted by IDR about that tax.
Warning: If you put a past start date on your permit application, you'll owe returns, penalties, and interest back to that date. You also become ineligible for voluntary disclosure for those periods, so look into voluntary disclosure before you apply.
If you have physical nexus in Iowa, you need a permit before your first taxable Iowa sale, regardless of your sales volume. The $100,000 threshold doesn’t apply.
These create physical presence, whether permanent or temporary:
Related businesses can also create Iowa sales tax nexus for you. That applies when a business with Iowa nexus sells similar products under a similar name, or delivers, installs, or services your products in Iowa.
Iowa's marketplace facilitator law requires marketplaces with $100,000 or more in Iowa sales to collect tax on every taxable Iowa sale they facilitate. Iowa doesn't let the marketplace and seller agree to shift that duty to the seller.
Whether you need your own permit depends on how you sell:
Inventory stored in Iowa is property in Iowa, which gives you a physical presence. If you're an Amazon FBA seller with inventory in an Iowa warehouse, you need a permit for any direct Iowa sales, whatever the amount.
If all your Iowa sales go through marketplaces that collect Iowa tax, you still don't need a permit.
Business entities need a Federal Employer Identification Number (FEIN) from the IRS before they apply. Sole proprietors and individually owned single-member LLCs can register with a Social Security number or ITIN instead, though a withholding account needs an FEIN for every business.
A sole proprietor needs an FEIN only if they have employees or federal excise taxes, or sell alcohol, firearms, or tobacco.
The GovConnectIowa registration and Form 78-005 ask for:
For corporations, partnerships, LLCs, and associations, have the name, address, and Social Security number of every managing owner, partner, or officer ready.
Officers and partners who control tax payments and have a substantial ownership interest can be personally liable if the business intentionally fails to pay sales tax.
The sales and use tax section of Form 78-005 also asks:
Seasonal businesses that sell in Iowa four or fewer months a year can ask to file as seasonal filers when they register. You can't switch to seasonal later without canceling your permit and registering again.
IDR recommends registering online through GovConnectIowa, its free online portal. Go to the Business Permit Registration page, open Online Permit Business Registration, and select Register Online.
To apply on paper, complete Form 78-005, Iowa Business Tax Permit Registration. Mail it to Registration Services, Iowa Department of Revenue, PO Box 10470, Des Moines, IA 50306-0470, or fax it to 515-281-3906.
Don't email the form. IDR won't accept it if it arrives more than six months after the date you signed it.
Go to GovConnectIowa. If you already have a logon, log in. Otherwise, select Sign Up under New to GovConnectIowa?
The Sign Up screen asks for your full name, username, email address, phone number, and phone type. It has a Verify Email button next to your email, and Next takes you to the Security step.
Tip: GovConnectIowa times out after 30 minutes of inactivity, and unsaved information is lost. Have your FEIN, NAICS code, and owner details ready before you start.
Log in to GovConnectIowa and select Register a New Business. The same page lists the other permits and licenses you can apply for, such as withholding.
Follow the on-screen prompts to finish the registration. The application asks for the business, owner, and Iowa-specific details listed above.
You apply for the Sales and Use Tax Permit during this registration, along with any other permits you need, such as withholding if you'll have Iowa employees. There's no fee for the Sales and Use Tax Permit.
IDR sends a letter with your account number, IDR ID, and instructions for filing and paying. If you registered in GovConnectIowa, the letter is also available under View Letters.
Keep a copy of your completed registration request. Your filing frequency is included in the letter.
Wait until IDR issues your permit before you make taxable sales.
An Iowa Sales and Use Tax Permit is free. There's no charge for additional locations and no renewal fee.
Most applicants don't post a bond. IDR may require one from a new applicant in these cases:
The bond is generally five months of tax for monthly filers or one year of tax for annual filers, with a $100 minimum. IDR accepts cash, surety bonds, securities, or certificates of deposit.
Your permit letter can arrive in as little as one business day. Allow up to six weeks for it to arrive in the mail.
IDR doesn't publish separate processing times for online and paper applications. Registering through GovConnectIowa is the fastest way.
Iowa doesn't issue temporary permits. Vendors get a permanent permit, which covers every event during the year.
At each event, give the sponsor your name, address, and permit number. Sponsors must get a permit number or a good faith statement from each vendor. If they don't, they may be responsible for the tax the vendor doesn't collect.
Some event sponsors are marketplace facilitators that collect tax for their vendors. Check with the sponsor before the event to find out whether you need your own permit.
Charge Iowa sales tax from your permit's start date: the 6% state rate plus the 1% local option sales tax where it applies. Permit holders collect both, and you can look up rates with IDR's Sales Tax Rates Lookup.
Remote sellers must start collecting by the first day of the month that starts at least 30 days after they cross $100,000.
IDR assigns your filing frequency from the tax you expect to collect:
Hotel and motel, automobile rental, and construction equipment taxpayers file monthly, whatever the amount.
You can file Iowa sales tax returns in GovConnectIowa. Monthly and seasonal returns are due by the last day of the following month and must be filed and paid electronically, unless IDR approves a paper exception. Annual returns are due by Jan. 31.
You must file a return for every period from your start date, even if you had no sales.
Your permit doesn't expire. It stays valid until you cancel it or IDR suspends or revokes it.
If you held an Iowa permit before, you only need to apply again if your business moved to a new county or you're now a remote seller.
If you close the business, cancel the permit, and file returns through the cancellation date.
Registration rules differ by state, and several require renewal.
No. An EIN is a federal tax ID from the IRS. An Iowa Sales and Use Tax Permit is IDR's authorization to collect Iowa sales tax, and it comes with its own Iowa account number.
It depends on your entity type. Sole proprietors and individually owned single-member LLCs can register with a Social Security number or an ITIN.
Corporations, partnerships, multi-member LLCs, and other business entities need an EIN. Form 78-005 is returned if a business entity leaves it blank.
Yes, if you sell from more than one place of business in Iowa. Iowa law requires a permit for each place where taxable sales happen.
Locations you add in GovConnectIowa are filed on one return. Sellers whose locations are all outside Iowa get a single permit.
Yes. Remote sellers under the threshold can register for a permit to collect use tax for their Iowa customers. They report it as sales subject to use tax on the return.
Yes, if you buy a business, and sometimes if you move.
Yes. Sales tax permits aren't confidential, and IDR publishes active and inactive registrations in a tax permit database.
If you've lost your own permit number, you can find it under the Summary tab in GovConnectIowa.
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