Iowa Sales Tax Changes for DTC (updated July 19, 2019)

Iowa will require remote sellers, including out-of-state wineries, to collect Iowa state sales tax and applicable local option sales tax on sales shipped to consumers in Iowa beginning Jan. 1, 2019, if they have $100,000 or more in gross revenue from Iowa sales or *200 or more separate sales transactions in the state during a calendar year. More information on how gross revenue relating to the small remote seller exception is computed can be found on the Iowa Department of Revenue (IDR) website.  

Businesses exceeding the small remote seller exception may register for an Iowa sales tax permit through the IDR Online Business Permit Registration system. A business may begin collecting sales tax immediately after completing the online registration request for a sales permit. IDR advises businesses to retain a copy of their online registration request as proof of registration until they receive their permit number and Business eFile Number (BEN) in the mail, which may take up to six weeks.

*Iowa Governor Kim Reynolds signed tax reform legislation (H.F. 779) on May 3, 2019. The new law eliminates the “200 or more separate transactions sales threshold” for remote sellers, effective July 1, 2019.  Starting July 1, 2019, only wineries that have $100,000 or more in gross revenue from Iowa sales in a calendar year must register to collect sales tax.