The first major state tax in Iowa was created in 1921 when the state passed a 2¢ per package tax on cigarettes. Iowa was the first state to pass a cigarette tax. In 1934 the sales and income taxes were created as property tax relief measures.
Since that time several significant changes have occurred, both in the tax base and in the tax rates of Iowa’s major revenue sources. While certain changes in a particular tax base may be of equal or greater importance than changes in the tax rate, the history of the key developments in a particular tax may often be identified through an examination of tax rate changes. Additional information may be obtained by contacting the Tax Research and Program Analysis Section of the Director’s Office.
| Individual Income Tax | Corporation Income Tax |
| Cigarette Tax | Tobacco Products Tax |
| Sales and Use Tax | Motor Fuel / Diesel Fuel Tax |
| 1934 | tax enacted at | 1% – 5% |
|---|---|---|
| 1953 | rate changed to | .75% – 3.75% |
| 1955 | rate changed to | .8% – 4% |
| 1957 | rate changed to | .75% – 3.75% |
| 1967 | rate changed to | .75% – 5.25% |
| 1971 | rate changed to | .75% – 7% |
| 1975 | rate changed to | .5% – 13% |
| 1987 | rate changed to | .4% – 9.98% |
| 1998 | rate changed to | .36% – 8.98% |
| 1934 | tax enacted at | 2% |
|---|---|---|
| 1955 | rate changed to | 3% |
| 1957 | rate changed to | 2% |
| 1959 | rate changed to | 3% |
| 1965 | rate changed to | 4% |
| 1967 | rate changed to | 4% – 8% |
| 1971 | rate changed to | 6% – 10% |
| 1981 | rate changed to | 6% – 12% |
| 1934 | sales tax enacted at | 2% |
|---|---|---|
| 1937 | use tax enacted at | 2% |
| 1955 | rate changed to | 2.5% |
| 1957 | rate changed to | 2% |
| 1967 | rate changed to | 3% |
| 1983 | rate changed to | 4% |
| 1992 (July 1) |
rate changed to | 5% |
| 2008 (July 1) |
rate changed to | 6% |
| 1921 (April 11) |
tax enacted at | 2¢ / package |
|---|---|---|
| 1953 | rate changed to | 3¢ / package |
| 1959 | rate changed to | 4¢ / package |
| 1963 | rate changed to | 5¢ / package |
| 1965 | rate changed to | 8¢ / package |
| 1967 | rate changed to | 10¢ / package |
| 1971 | rate changed to | 13¢ / package |
| 1981 | rate changed to | 18¢ / package |
| 1985 | rate changed to | 26¢ / package |
| 1988 | rate changed to | 34¢ / package |
| 1989 | rate changed to | 31¢ / package |
| 1991 | rate changed to | 36¢ / package |
| 2007 (March 16) |
rate changed to | $1.36 / package |
| 1967 | tax enacted at | 10 percent of wholesale |
|---|---|---|
| 1985 | rate changed to | 15 percent of wholesale |
| 1988 | rate changed to | 19 percent of wholesale |
| 1991 | rate changed to | 22 percent of wholesale |
| 2007 (March 16) |
rate changed to | Cigars: $.50 or 50 percent per cigar, whichever is lower Snuff: $1.19 per ounce All other OTP products: 50 percent of wholesale |
| 1925 | tax enacted at | 2¢ / gal. gasoline 2¢ / gal. diesel |
|---|---|---|
| 1943 | rate changed to | 3¢ / gal. gasoline 3¢ / gal. diesel |
| 1945 | rate changed to | 4¢ / gal. gasoline 4¢ / gal. diesel |
| 1953 | rate changed to | 5¢ / gal. gasoline 5¢ / gal. diesel |
| 1955 | rate changed to | 6¢ / gal. gasoline 6¢ / gal. diesel |
| 1957 | rate changed to | 7¢ / gal. gasoline 7¢ / gal. diesel |
| 1965 | rate changed to | 7¢ / gal. gasoline 8¢ / gal. diesel |
| 1978 | rate changed to | 8.5¢ / gal. gasoline 10¢ / gal. diesel |
| 1981 | rate changed to | 13¢ / gal. gasoline 13.5¢ / gal. diesel |
| 1982 | rate changed to | 13¢ / gal. gasoline 15.5¢ / gal. diesel |
| 1985 (July 1) |
rate changed to | 15¢ / gal. gasoline 16.5 ¢ / gal. diesel |
| 1986 (Jan. 1) |
rate changed to | 16¢ / gal. gasoline 17.¢ / gal. diesel |
| 1987 | rate changed to | 16¢ / gal. gasoline 18.5 ¢ / gal. diesel |
| 1988 | rate changed to | 18¢ / gal. gasoline 20.5 ¢ / gal. diesel |
| 1989 | rate changed to | 20¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2002 (July 1) |
rate changed to | 20.1¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2003 (July 1) |
rate changed to | 20.3¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2004 (July 1) |
rate changed to | 20.5¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2005 (July 1) |
rate changed to | 20.7¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2006 (July 1) |
rate changed to | 21¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2007 (July 1) |
rate changed to | 20.7¢ / gal. gasoline 22.5 ¢ / gal. diesel |
| 2008 (July 1) |
rate changed to | 21.0¢ / gal. gasoline 22.5 ¢ / gal. diesel |