Starting a Business

You Will Need To...

Find out if the goods or services you will be selling are subject to Iowa sales tax.

Find out if you need to pay use tax.

  • If you purchase taxable items to use in your business in Iowa from out-of-state suppliers and do not pay sales tax, you will need to pay use tax to Iowa. See sales and use tax guide for more information.

Register for a permit if the sale of goods or services are taxable.


This is a combined registration form, which means you can register for one or more of the following:

  • Sales and Use Tax
    • Automobile Rental 
    • Hotel and Motel 
    • Construction Equipment
    • 911 Surcharge 
  • Household Hazardous Materials
  • Withholding Tax
  • Water Service Excise Tax

If you will be selling household hazardous material (HHM), you will need to obtain a separate HHM permit.

Keep a copy of the form. You may begin to collect tax immediately; your proof of registration is your copy until we send you your permit number in about 4-6 weeks. The sales tax permit itself is free of charge.

A sales tax permit is not a license to buy tax-free. It is a license to collect tax. For your exempt purchases, you must use exemption certificates; see below.

Learn about Iowa's local option tax.

  • Local option tax is in addition to the state rate. Iowa's state sales tax rate is 6% as of July 1, 2008.
  • For more information about the "regular" local option tax, consult the Local Option Questions.
  • A list of current Local Option Jurisdictions is available, updated in June and in December.

Obtain exemption certificates.

You will give a completed Exemption Certificate to each supplier when you buy goods and services for resale or other exempt purposes. Similarly, you will also need to obtain exemption certificates from your customers when they purchase goods or services from you for resale or other exempt purposes. Keep these for your records.

Continue to learn more about Iowa taxes and keep up with changes in the law.

Subscribe to e-mail updates

  • File and remit the tax.

    The Department no longer provides paper forms. Business taxes (sales, use, withholding, fuel) are filed electronically.

  • No.

    You will need a FEIN if...

    • You are a sole proprietorship and have employees or
    • Your business is a corporation or
    • Your business is a partnership or
    • You sell alcohol, firearms or tobacco or
    • You need to pay federal excise taxes

    How to apply for a FEIN...

    You can apply for your FEIN online through the IRS Website or obtain the paper application for FEIN by downloading SS-4, Application for Employer Identification Number (pdf).

    Be sure to read "How to Apply" on page two of the SS-4 instructions.

    You do not need a FEIN if...

    • You are a sole proprietor but do not have employees and
    • You do not sell alcohol, firearms or tobacco and
    • You do not need to pay federal excise taxes
  • If so, you will need to:

    Register to be an Iowa withholding agent through the online Iowa Business Registration form

    Apply for a federal identification number (FEIN) with the Internal Revenue Service. You can apply for an FEIN online or you can use form SS-4 (pdf); this will become your state number for withholding tax purposes.

    Have each employee fill out a Federal W-4 (pdf) and an Iowa W-4 (access by filtering by Withholding Tax, search keyword W-4 and current year). These forms provide the information necessary to determine how much federal income tax and state income tax to withhold from your employees' paychecks.

    The Iowa Withholding Tax Tables are necessary to calculate how much Iowa income tax to withhold. The Internal Revenue Service will send you similar information for federal purposes.

    Information About Iowa Withholding Tax explains how withholding works.

    Will your workers be independent contractors, not employees?

    Your tax liabilities change if your workers are independent contractors. Learn more about this by reading Employees or Independent Contractors.

  • If you are a sole proprietor or in a partnership, you need to pay your income taxes by making estimated tax payments. You will need to make estimated tax payments for federal tax and estimated tax payments for Iowa tax. Estimated Taxes, explains how and when to make Iowa payments.

    You have two options for making Iowa estimated payments.


    • Set up estimated payments by electronic funds transfer and check your payment history. This online service is free and secure.


    Be sure to make federal estimated payments also.

    You may use the federal online system or paper forms are available.

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