Iowa Car Sales Tax Calculator

By Mohamed SkhiriUpdated November 7, 2026

Iowa car sales tax: the fee for new registration

Iowa Code § 321.105A imposes the fee on every vehicle that has to be registered, in addition to the annual registration fee. You pay it to the county treasurer when you apply for the new registration and title, and the registration isn't issued until it's paid. The treasurers send the money to the Department of Revenue every month. The "purchase price" is figured the same way as the sales price under Iowa's sales tax law, so in practice the 5% works like a sales tax that the county collects instead of the dealer. The Department of Revenue says vehicles subject to registration are exempt from sales tax and pay this fee instead, including on sales between private individuals. The fee used to be called the one-time registration fee, or the motor vehicle use tax.

What comes off the price

• Manufacturer cash rebates, as long as the rebate is applied to the purchase price.
• Trade-ins at a dealer: the part of the price paid with a traded vehicle, if it's the kind of vehicle the dealer normally sells and is meant for resale.
• Trade-ins between private parties: also excluded, at the trade-in value the two of you agree on.

For the trade-in to count, the same person has to be on the title of the traded vehicle and the new one. The law allows a few exceptions: trades between spouses, trades between lineal family members (including adopted and step relationships) where one of them is on both titles, trades involving a business entity on the title, and cases where a lender requires a cosigner on the new title.

When no 5% fee is due

• A gift from one individual to another, with nothing paid
• A vehicle given by a corporation to a retiring employee
• A vehicle delivered to a resident Native American on a reservation
• Homemade vehicles built from parts you already paid sales tax on
• Salvage-titled vehicles, until they're rebuilt and get a regular title. The fee is then based on fair market value minus the taxed parts.

Iowa annual registration fee

Section 321.109 sets the yearly fee for cars, station wagons, multipurpose vehicles, and 2010-and-newer trucks with an unladen weight of 10,000 lbs or less: 1% of the value as fixed by the DOT, plus 40 cents for each 100 pounds or fraction of the vehicle's weight. Section 321.113 then reduces it with age:

After seven years the fee can't drop below $50. The weight part (here 42 × $0.40 = $16.80) doesn't shrink with age. Battery electric vehicles add $130 a year and plug-in hybrids $65 (§ 321.116). A vehicle with permanently installed equipment for a person with a disability, or for a household member who uses a wheelchair as their only means of mobility, pays a flat $60.

Worked examples

Frequently asked questions