Many taxpayers are not aware Iowa has a 6% consumer’s use tax. Consumer’s use tax normally applies to items purchased outside Iowa and brought in or delivered into Iowa, such as:
- online purchases
- mail-order catalogs
- television shopping programs
- toll-free 800 numbers
Why Pay Use Tax?
- Use tax protects Iowa businesses from unfair competition by ensuring tax will be paid even if an out-of-state seller is not required to collect it from the purchaser.
- When tax is not collected on taxable purchases and services used in your community, local businesses operate at a competitive disadvantage.
- This affects the economic health of your community and state by hurting main street businesses, the ones who employ our citizens, pay property tax, and support local organizations.
New Options to Report Use Tax
- eFile & Pay– you can now pay consumer’s use tax electronically on our Web site, even if you don’t have a consumer’s use tax permit.
- Consumer’s Use Tax Worksheet – a fillable online worksheet to report consumer’s use tax and mail with a check.
Please review the following to determine if you might owe the tax and how to pay it if you do.
This tax was established in 1937, three years after the sales tax was enacted, to create a fair playing field for Iowa businesses. In Iowa, the rate of the consumer's use tax is always equal to the state sales tax rate.