Tax Guidance

The guidance available here explains the general guides rather than detailed discussions of Iowa tax law. We make every attempt to keep guidance current, however, changes in law or policy may not be immediately reflected.

If you have tax questions, search our Frequently Asked Questions.

Tax Guidance

Tax Type:
Sales & Use Tax

During the 2019 Legislative Session, the General Assembly added a new exemption from sales and use tax under House File 779 for grain bins and grain bin materials, effective July 1, 2019. The Department has adopted administrative rules to implement the new exemption. The rules went into effect August 19, 2020. This guidance summarizes the exemption and new administrative rules and addresses some common questions and issues taxpayers may have about the exemption.

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Withholding Tax

Guidance regarding who must act as an Iowa Withholding Agent? plus additional details regarding employee exemption, what income is subject to withholding, taxable compensation, reporting/paying withholding tax, failure to withhold, and penalty/interest.

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Inheritance Tax

This is basic information on the Iowa inheritance tax and is not information regarding probate. This information is not a substitute for legal advice. Please contact an attorney for legal advice or if you have questions concerning probate or any other estate question.

A person who has died may leave property to certain individuals or groups. This may be done through the making of a Will, which is a written document explaining to whom he or she wishes to leave the property. A person may also die without making a Will. If this occurs, Iowa law provides for distribution of the property. Because there are other possible ways to distribute your property, you may wish to consult an attorney or an individual specializing in estate planning.

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Tax Type:
Sales & Use Tax

On June 29, 2020 Governor Reynolds signed into law House File 2641. House File 2641 enacted several changes and clarifications to Iowa tax laws on topics of administration, income, sales, and property tax. This is intended to be a basic overview of the sales and use tax provisions of this Act.

The Iowa tax laws that were revised included: Computer Peripherals, Updates to Certain Digital Products and Services, Preserve Whitetail Hunting Exemption, Tribal Governments, Exemptions and Refunds on Certain Construction Projects, Manufactured Housing Use Tax Rate, Sales and Use Collection Obligations, Snowmobile and ATV Sales Tax Collection

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Other Taxes & Fees

On June 24, 2020 Governor Reynolds signed into law House File 760. House File 760 added a new exemption from hotel & motel tax for certain guests staying with hospital patients. Additionally, this bill included changes for extended rentals. The Department has revised its website guidance on the taxation of hotel room rentals to reflect these changes, which went into effect on July 1, 2020.

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Income Tax, Iowa Tax Reform

For tax years beginning on or after January 1, 2019, and before January 1, 2020, Iowa conforms with the federal Internal Revenue Code (IRC) in effect on March 24, 2018. For tax years beginning on or after January 1, 2020, Iowa has adopted rolling conformity with the IRC. Iowa did not conform with many of these changes for tax year 2018. See the 2018 Iowa Nonconformity Adjustments Worksheet for information about how to make the necessary adjustments for Global Intangible Low Tax Income (GILTI), Foreign Derived Intangible Income (FDII), and other Tax Cuts and Jobs Act (TCJA) items for tax year 2018.

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Income Tax, Iowa Tax Reform

On March 23, 2018, President Trump signed into law the Consolidated Appropriations Act, 2018 (P.L. 115-141). Among other changes to the Internal Revenue Code (IRC), this bill included a fix to the so called “grain glitch,” which occurred when IRC section 199 was repealed under Tax Cuts and Jobs Act (TCJA) in 2018. This guidance is for Specified Agricultural and Horticultural Cooperatives claiming the IRC section 199A(g) deduction (New DPAD). For tax years 2019 and later, qualifying co-ops will generally be allowed to claim 100% of the federal 199A(g) deduction and will be required to take 100% of any reduction to the cooperative’s IRC section 1382 deduction resulting from the new DPAD allocated to patrons for Iowa purposes.

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Tax Type:
Sales & Use Tax

To facilitate the review of relevant claims filed with the Department and to expedite the correct determination of the tax-exempt status of temporary labor service transactions, the Department has produced this guidance to notify taxpayers and tax practitioners of information that should be included with every refund claim form Iowa 843 that contains requests for refunds of tax paid on temporary labor services.

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Income Tax

On December 20, 2019, President Donald Trump signed Public Law 116-94, the Further Consolidated Appropriations Act of 2020. Division Q of that Act, entitled the “Taxpayer Certainty and Disaster Tax Relief Act of 2019” extends several federal tax provisions, many retroactively to tax years 2018 and 2019. Division O of the Act, entitled the “Setting Every Community up for Retirement Enhancement Act” (SECURE Act) also contains a number of provisions that may have tax effects for some taxpayers.

Generally, Iowa does not conform with these federal tax changes to the extent they apply to a tax year beginning prior to January 1, 2020. However, Iowa has conformed with certain provisions related to 529 plans. This guidance describes Iowa's general nonconformity with this federal law for tax years beginning in calendar year 2018 or 2019. Iowa generally conforms with these federal tax changes (with one exception), to the extent they affect Iowa income taxes, for tax years beginning on or after January 1, 2020.

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Tax Type:
Sales & Use Tax

Landscaping, lawn care, and tree trimming and removal services are subject to Iowa sales and use tax. Persons providing such services must obtain a sales tax permit and remit sales tax to the Department of Revenue. Snow removal services are not a taxable service in Iowa. Expand each topic for full details.

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