What happens when an item is purchased outside Iowa? Would local option sales tax be due?
• If the item is brought into Iowa by the purchaser: No. These transactions are subject to the state consumer’s use tax. Local option sales tax can only be imposed when state sales tax is applicable. Iowa does not impose a local option use tax. • If the item is brought into Iowa by the seller in the seller’s own vehicle: Yes, if delivery occurs in a local option jurisdiction. • If the item is sent into Iowa by a common carrier with an FOB Shipping Point designation or without an FOB designation, or through the U.S. Postal Service: If the out-of-state retailer is registered to collect Iowa tax, the state rate is charged. If the retailer is not registered, the customer owes consumer’s use tax. No local option tax is due in either case. • If the item is sent into Iowa by a common carrier with an FOB Destination designation: If the out-of-state retailer is registered to collect Iowa tax, the state rate is charged as well as any local option tax imposed by the destination jurisdiction.
