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 the tangible personal property, specified digital product, or service is taxable.
This is a combined registration form, which means you can register for one or more of the following permits:
You may register electronically via GovConnectIowa, or complete an Iowa Business Tax Permit Registration (78-005). If you submit the paper form, please keep a copy. Once you have submitted your registration request, it will be reviewed by the Department. If approved, a letter will be mailed with your account information, including your Iowa Department of Revenue ID (IDR ID), account ID/permit number, filing frequency, and instructions on how to file and pay taxes. You may begin to collect tax immediately upon issuance of the tax permit. Once issued, a permit is effective until it is canceled by the owner or suspended or revoked by the Department. A 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 exempt purchases or sales, you must use or obtain an exemption certificate(s); see below.
Learn about Iowa's Local Option Sales Tax (LOST).
Many cities and counties have a 1% local option sales tax, which is in addition to the state sales tax rate. Iowa's state sales tax rate is 6% as of July 1, 2008.
You will give a completed Iowa Sales/Use/Excise Tax Exemption Certificate (31-014) (223.11 KB) Archived .pdf to each vendor when you buy goods and services for resale or for 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.
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Have each employee fill out a Federal W-4 and an Iowa W-4 Employee Withholding Allowance (44-019). These forms provide the information necessary to determine how much federal income tax and state income tax to withhold from your employees' paychecks.
Iowa Withholding Tax Information explains how withholding works including the Iowa Withholding Tax Tables or Formulawhich are necessary to calculate how much Iowa income tax to withhold. Contact the Internal Revenue Service (IRS) for withholding information for federal purposes.
Will your workers be independent contractors, not employees?
Your tax liabilities change if your workers are independent contractors. The Internal Revenue Service (IRS) establishes the criteria for determining if a worker is an employee or an independent contractor. If you have employees and not independent contractors, you must act as a withholding agent on both the federal and state levels.
If you want the IRS to determine whether or not a worker is an employee, file IRS Form SS-8 (pdf) (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the IRS.
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 Iowa tax. Estimated Income Tax Payments explains how and when to make Iowa payments.
You have two options for making Iowa estimated payments:
Online Make estimated payments using GovConnectIowa. This online service is free and secure.
Paper: Make sure to include a payment voucher or provide information advising who the payment is for and the tax period it should be applied to.
To create and print a payment voucher please use the steps below:
Employers' Council of Iowa: Works in conjunction with Iowa Workforce Development to offer guidance, support, training, and other resources to small and medium sized businesses.
