Related Topics:

Sales, Use & Excise Tax

Foods for Human Consumption

The exempt status of the purchase of food is not solely determined by whether the food is eligible for purchase with Food Stamps. Many products are exempt from Iowa sales tax whether or not they are purchased with Food Stamps.

Food Stamp Purchases

When eligible food items are purchased using only Food Stamps, they are exempt from sales tax.

If a purchase is made using Food Stamps and cash, a retailer may choose to either (1) exempt the entire purchase of eligible food items, or (2) apply the value of the Food Stamps first to eligible food items that otherwise are taxable, charging no tax on the sale of those items while charging sales tax on any remaining items for which cash is paid. Call the US Department of Agriculture, Food and Nutrition Service at 515-284-4035 if you have questions about whether or not an item can be purchased with Food Stamps.

Once a retailer chooses one of these two methods, it applies to all sales by that retailer until the Department of Revenue is notified of a change.