Tool | January 2018

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, sin products, property, and more -- across the U.S.


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The Bottom Line
Map of Iowa

Not Tax-Friendly

Iowa has a top tax bracket of almost 9%, and brings it to bear on a relatively low level of taxable income, giving the Hawkeye State an income tax bite that exceeds many East Coast states. Real estate taxes lean high, too. On the bright side, in Iowa you can deduct your federal income taxes from your state taxable income.

Sales Tax

6.0% state levy. Localities can add as much as 1%, and the average combined rate is 6.80%, according to the Tax Foundation.

Income Tax Range

Low: 0.36% (on up to $1,554 of taxable income)

High: 8.98% (on taxable income over $69,930).

Iowa also allows residents to deduct federal income tax from state taxable income.

Effective income tax rate: 5.3%/individual, 7.6%/joint

See’s Retiree Tax Map to learn how Iowa taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.31 per gallon.
Diesel: $0.33 per gallon.

Property Taxes

The median property tax on Iowa's median home value of $129,200 is $1,916.

See’s Retiree Tax Map for details on tax breaks for seniors in Iowa.

Vehicle Taxes

Vehicles are subject to a one-time registration fee of 5% of the sales price.

Sin Taxes

Beer: $0.19 per gallon
Wine: $1.75 per gallon
Liquor: $12.52 per gallon
Iowa directly controls the distribution and sale of alcohol. Liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation.

Cigarettes: $1.36 per pack
Snuff: $1.19 per ounce
Other tobacco products: 50% of the wholesale price, not to exceed $0.50 per cigar.

Travel Taxes

Hotel: In addition to a statewide lodging tax of 5%, municipalities can levy an additional 2% to 7%. These are in lieu of state and local sales taxes

Rental cars: 5%, plus sales tax.

Taxes On Wireless Service


Inheritance and Estate Taxes

Iowa has no estate tax. The inheritance tax ranges from 0% to 15%, depending on the amount of the inheritance and the relationship of the recipient to the decedent, with these exceptions: No tax is due on property left to a surviving spouse, stepchildren, lineal descendants (children, grandchildren, etc.) or lineal ascendants (parents, grandparents, etc.), and no tax is due if the estate’s net value is less than $25,000.

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