What happens when an item is purchased outside Iowa? Would school 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. School 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 school 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 5 percent state rate is charged. If the retailer is not registered, the customer owes 5 percent consumer’s use tax. No school 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 5 percent state rate is charged as well as any school loca
