Is Shipping in Iowa Taxable?

by Jennifer Dunn January 21, 2021


Last updated July 14, 2017

When Winston Churchill said, “It is a riddle, wrapped in a mystery, inside an enigma…” he was talking about Russia, but he could have very well been talking about sales tax. Especially when you consider that each state has diverse rules as to how it’s applied. Today we will answer whether or not sellers will need to pay sales tax on shipping and handling in Iowa.

Is Shipping Taxable in Iowa?

Here is what the Iowa Department of Revenue has to say on the matter:

Iowa

This seems fairly straightforward. In order for sales tax to not be charged on shipping and handling, the seller must do one of two things.

  1. Separately invoice the shipping and handling charges.

OR

  1. State the shipping and handling charges separately on the bill.

Handling Iowa Shipping and Handling Sales Tax with TaxJar

The TaxJar app defaults to the most common Iowa scenario – that shipping and handling is non-taxable.However, if your business does charge sales tax on shipping, then TaxJar’s Shipping & Handling Override allows you to update that in your state tax settings. This will make the Iowa Expected Sales Tax Due Report more accurate. This will also tell the TaxJar API to charge sales tax on Iowa shipping.Learn more about how TaxJar treats shipping and handling here.Have questions or comments about taxable shipping in Iowa? Leave a comment and start the discussion! And to learn more about TaxJar and get started, visit TaxJar.com/how-it-works.

In Conclusion:

Iowa’s rules on shipping taxability are very straightforward. Sales Tax does not have to be charged on shipping and handling in the Hawkeye State, if the seller either separately invoices for shipping and handling or states shipping and handling charges separately on the bill.

Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.

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