Iowa Sales and Use Tax: Taxable Services

(Updated 2/15/21)

At the time of a taxable purchase, Iowa state sales/use tax is collected by the retailer from the buyer. Unlike tangible personal property, which is subject to sales/use tax unless specifically exempted by Iowa law, services are subject to sales/use tax only when specified by Iowa law. Iowa sales tax is due when the first use of a taxable service occurs, or potentially could occur. The Iowa use tax complements the Iowa state sales tax. Generally, when a taxable service is purchased or obtained outside of Iowa for use in Iowa, it is subject to Iowa use tax.

The Department makes every attempt to keep this list current. However, please reference Iowa Code section 423.2(6) for the official listing of taxable services in Iowa.

    • Aircraft lease or rental, 60 days or less
    • Alteration and garment repair
    • Armored car services
    • Bank and financial institution service charges
    • Barber and beauty services
    • Battery, tire, and allied services
    • Boat repair
    • Camera repair
    • Campgrounds
    • Carpentry repair and installation
    • Carpet, rug, and upholstery cleaning and repair
    • Communication services, excluding Internet access fees
    • Dance school and dance studio
    • Dating services
    • Demolition
    • Dry cleaning, pressing, dyeing, and laundering excluding the use of self-pay washers and dryers
    • Electrical and electronic repair and installation
    • Employment and executive search agencies
    • Excavating and grading
    • Extermination services
    • Farm implement repair of all kinds
    • Flying service and instruction
    • Furniture repair and cleaning
    • Fur storage and repair
    • Garbage collection and disposal, nonresidential commercial only
    • Golf and country clubs and all commercial recreation fees, dues, and charges
    • Gun repair
    • House and building moving
    • Household appliance, television, and radio repair
    • Investment counseling
    • Information services
    • Janitorial and building maintenance or cleaning (non-residential only)
    • Jewelry and watch repair
    • Landscaping, lawn care, and tree trimming and removal
    • Machine operator fees
    • Machine repair of all kinds
    • Massages, unless performed by a licensed massage therapist
    • Mini-storage
    • Motor repair
    • Motor vehicle, recreational vehicle, and recreational boat rental (when rented without a driver or operator)
    • Motorcycle, scooter, and bicycle repair
    • Oilers and lubricators on vehicles and machines
    • Office and business machine repair
    • Painting, papering, and interior decorating
    • Parking facilities
    • Pay television, including but not limited to streaming video, video on-demand, and pay-per-view
    • Personal transportation service
    • Pet grooming
    • Photography & Retouching Services
    • Pipe fitting
    • Plumbing, including drain cleaning and unplugging toilets, sinks, and sewers
    • Reflexology
    • Retouching photographs
    • Roof, shingle, and glass repair
    • Security and detective services
    • Sewage services, nonresidential commercial only
    • Sewing and stitching
    • Shoe repair and shoeshine
    • Sign construction and installation
    • Services arising from or related to installing, maintaining, servicing, repairing, operating, upgrading, or enhancing specified digital products
    • Software as a service
    • Storage warehouse or lockers of raw agricultural products
    • Storage of household goods
    • Storage of tangible or electronic files, documents, or other records
    • Swimming pool cleaning and maintenance
    • Tanning beds or tanning salons
    • Taxidermy
    • Telecommunication services, excluding Internet access fees
    • Telephone answering service and telephone services
    • Test laboratories, excluding tests on humans and animals and environmental testing
    • Tin and sheet metal repair
    • Tree trimming and removal
    • Turkish baths and reducing salons
    • Vehicle repair
    • Vehicle wash and wax
    • Video game services and tournaments
    • Water conditioning and softening
    • Weighing
    • Welding
    • Well drilling (repair only)
    • Wood preparation (for example, stripping, cleaning, sealing)
    • Wrapping, packing, and packaging of merchandise other than processed meat, fish, fowl, and vegetables
    • Wrecker and towing

    The following are considered sales of tangible personal property and are taxable:

    • Engraving
    • Equipment and tangible personal property rental
    • Optional warranty contracts
    • Prepaid calling services and prepaid wireless calling services
    • Printing and binding
    • Recapping and retreading tires
    • Vulcanizing
  • The following is not an exhaustive list of exemptions, but rather illustrates those that most commonly relate to otherwise taxable services. To read all exemptions, see Iowa Code sections 423.3 for sales tax and 423.6 for use tax.


    When services are performed on or connected with new construction, reconstruction, alteration, expansion, or remodeling of a building or structure, they are exempt from sales and use tax. Repair services remain taxable. For more information, see our Iowa Contractors Guide.

    Employee Services

    Services rendered, furnished, or performed for an “employer” are exempt.

    Exempt Entities

    Services provided to the following entities are exempt from sales and use tax: Iowa private nonprofit educational institutions, the federal government, Iowa governmental subdivisions, Iowa government agencies, certain nonprofit care facilities, nonprofit museums, and nonprofit legal aid organizations. However, services provided to most nonprofit entities, churches, and religious organizations are usually taxable.

    Purchases for Resale

    Tangible personal property purchased by one who is engaged in the performance of a service may be purchased for resale and is not subject to tax if (1) both the provider and the user of the service intend that the property will be sold, (2) the property is transferred to the customer in a form or quantity capable of a fixed or definite price value, and (3) the sale of the identifiable piece or quantity of property is evidenced or shown by a separate charge.

    Tangible personal property not sold as specified above is considered to be consumed by the purchaser who is engaged in performing a service and is subject to sales/use tax at the time of purchase.


    A beauty or barber shop purchases shampoo and other items to be used in the performance of its service. Tax is due at the time the shop buys the items from its supplier. Tax is due because the items are not transferred to the customer in a form or quantity capable of a fixed or definite price value and because the items are not specifically invoiced.

    Services for Resale

    Services purchased for resale are exempt from sales and use tax. A service is purchased for resale when the person who is contracted to perform the service subcontracts another to perform the service.


    An auto repair shop contracts with a customer to repair a damaged car. The shop does most of the repairs, but subcontracts the repair of the radiator to another shop. No sales tax is charged to the shop for repairing the radiator since the service was purchased for resale to the owner of the car. Tax is paid by the customer to the original repair shop.

    Restoring Tangible Property

    Similar to services for resale, services that recondition or repair tangible personal property are exempt from sales and use tax when that property is normally sold in the regular course of the retailer’s business. Sales and use tax will be paid when the property is finally sold to a consumer.

    Example 1

    The owner of a retail appliance store hires someone to repair a refrigerator that the owner is going to resell in the store. The owner can purchase the repair service tax free because the store regularly sells refrigerators and tax will be collected when it is sold to a final consumer.

    Example 2

    Chris operates a retail farm equipment dealership and accepts a motor boat as partial payment for a piece of farm equipment. Chris then contracts with Don to repair the motor on the boat. After Don repairs the boat, Chris sells the boat at his dealership. Chris does not normally sell motor boats in the regular course of business. Therefore, the service performed by Don for Chris is taxable.

    Casual Sales

    Services that qualify as casual sales are exempt from sales tax. In order for sales of services to qualify for exemption as casual sales, the sale must be made by a person who is not a retailer; or, if the seller is a retailer, the current sale must be unrelated to the retailer’s regular business and must not involve a liquidation of the business. Casual sales are exempt from the Iowa sales and use tax except for the casual sale of vehicles subject to registration, ATVs, off-road motorcycles, off-road utility vehicles, aircraft, or watercraft.

    Two separate sales unrelated to the seller’s regular business within a 12-month period are not considered to be typical and, therefore, are not taxable. Three separate sales within a 12-month period are considered recurring or typical. Tax applies beginning with the third sale. If a sale occurs consistently over a span of years, it is considered recurring and not casual, even though only one sale occurs each year.

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