Do You Need to Get a Sales Tax Permit in Iowa?
Quick Answer: You need to get a sales tax permit in Iowa if you meet economic or physical presence nexus requirements. More detailed information is included below.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, an economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in Iowa, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in Iowa for more information about that process. If you are not interested in doing the work of getting the permit yourself, TaxValet can handle the permit registration for you with our Sales Tax Permit Registration Service.
Common Ways to Have Sales Tax Nexus in Iowa
1. Economic nexus in Iowa
If you made $100,000 of sales in the current or immediately preceding calendar year into Iowa, then you are required to register for, collect and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in Iowa. Nexus has been created based on your volume of sales.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence in Iowa
The following creates physical presence nexus in Iowa. If you have any of the following in Iowa, you will need to get a sales tax permit:
- An office, warehouse, distribution house or place of business.
- A temporary or permanent employee, contractor, or other representative in Iowa.
- Install property you sold in Iowa.
- A construction contractor that performs a job in Iowa.
- Regularly engage in delivery of products to Iowa.
- Regularly engage in delivery of products by your own trucks in the state of Iowa.
For more information about nexus in Iowa, see IAC Rule 701.30.1.
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
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Do You Need a Sales Tax Permit in Iowa If You Only Sell on Marketplaces?
If you are an online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), sales tax will be remitted by the marketplace, and you are not required to get a sales tax permit in Iowa.
For more information about marketplace only sellers see “Sellers that only make Iowa sales through a marketplace that collects Iowa sales tax” at the Iowa Department of Revenue.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Sales Tax Starter Kit service. In fact, if at any point you are stuck and want a team of experts to handle all of this for you, don’t hesitate to contact us.