Iowa Tax Nexus
Businesses with nexus in Iowa are required to register with the Iowa Department of Revenue and to charge, collect, and remit the appropriate tax.
Generally, a business has nexus in Iowa when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.
Iowa nexus for out-of-state sellers
If your business has ties to businesses in Iowa, including affiliates, it may have nexus under a 2013 law. A retailer is presumed to be maintaining a place of business in Iowa if any person with substantial nexus in Iowa (other than a common carrier acting as such) does any of the following:
- Sells a similar line of products as the retailer and does so under the same or similar business name
- Maintains an office, distribution facility, warehouse, storage place, or similar place of business in Iowa to facilitate the delivery of property or services sold by the retailer to its customers
- Uses trademarks, service marks, or trade names in Iowa that are the same- or substantially similar to- those used by the retailer
- Delivers, installs, assembles or performs maintenance services for the retailer’s customers
- Facilitates the retailer’s delivery of property to Iowa customers by allowing them to take delivery of the property at an office, distribution facility, warehouse, storage place, or similar place of business maintained by the person in Iowa
- Conducts any other activities in Iowa that are significantly associated with the retailer’s ability to establish and maintain a market in Iowa for the retailer’s sales
The Iowa Department of Revenue provides a Nexus Questionnaire to assist taxpayers in determining if they must file sales tax returns.
See Iowa Code § 423.29; H.F.625; 701—30.1(423); and the Iowa Department of Revenue, Iowa Sales and Use Tax Guide and Situations Creating Sales Tax Nexus/E-Fairness.