Iowa has a flat 3.80 percent individual income tax rate. Iowa has a graduated corporate income tax, with rates ranging from 5.5 percent to 7.1 percent, a 6.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.94 percent. Iowa has a 1.33 percent effective property tax rate on owner-occupied housing value. Iowa does not have an estate tax or inheritance tax. Iowa’s gas tax is 30 cents per gallon, and its cigarette excise tax is $1.36 per pack of 20 cigarettes.
Iowa raises tax revenue primarily through property taxes (32.3 percent of total state and local tax revenue), general sales taxes (25.0 percent), and individual income taxes (22.9 percent). Iowa collects $6,471 in state and local tax collections per capita, carries $7,306 in state and local debt per capita, and has a 93 percent funded ratio of public pension plans. Iowa’s tax system ranks 17th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Iowa is no exception. Use the tabs below to compare Iowa taxes with other states and to see how Iowa raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).
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In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
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The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.
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