Last checked Nov 10, 2026
Buying a car in Iowa
The tax you will pay, whether your trade-in lowers it, what the dealer may charge for paperwork, and where to title and register. Taken from official Iowa sources.
- State tax on vehicles
- 5%
- Trade-in lowers tax
- Yes
- Doc fee limit
- $180
- Deadline to title or register
- 30 days
fee for new registration
details below
Sales tax on a car in Iowa
Iowa charges a state fee for new registration of 5% on vehicle purchases.
Vehicles subject to registration are exempt from Iowa sales tax and instead pay the state fee for new registration.
The fee is $10 plus 5% of the purchase price, is paid to the county treasurer, and also applies to sales between private individuals.
Does a trade-in lower the tax?
A trade-in allowance is excluded from the purchase price when the traded vehicle is a type the dealer normally sells and the same person is on the title of both vehicles.
Example, state tax only. On a $30,000 car with a $10,000 trade-in, the taxable amount is $20,000, so the state tax is about $1,000. Without the trade-in it would be $1,500. Local taxes and fees are extra.
Dealer doc fees in Iowa
Iowa Code section 322.19A allows a dealer to charge a documentary fee of no more than $180 for each vehicle sold. The dealer must disclose the full amount of the fee in any advertised price.
The documentation fee is not taxed.
Whatever the rule, the fee is part of your out-the-door price. Ask for it in the written quote and negotiate the total, not the line. See dealer fees explained.
Title and registration
Titles and registrations are handled by the Iowa Department of Transportation and county treasurers. The buyer must transfer the title within 30 days of purchase. A licensed dealer may transfer the title for the buyer and has 30 days to deliver the paperwork to the county treasurer.
Also worth knowing
- A buyer without plates to transfer may drive a currently registered vehicle for 30 days if proof of the purchase is carried in the vehicle.
- A documentary fee is not an official fee and is not required by law, and the purchase agreement must say so.
Sources
- Iowa Department of Revenue: Iowa Tax/Fee Descriptions and Rates (revenue.iowa.gov)
- Iowa Code section 321.105A: Fee for new registration (legis.iowa.gov)
- Iowa Administrative Code 701, chapter 250: Vehicles Subject to Registration (legis.iowa.gov)
- Iowa Code section 322.19A: Documentary fee (legis.iowa.gov)
- Iowa Department of Transportation: Vehicle and Title Fraud (iowadot.gov)
- Iowa Department of Transportation: How to Sell a Vehicle (iowadot.gov)
- Iowa Department of Transportation: Vehicle Registration and Titles (iowadot.gov)
Last checked Nov 10, 2026; next review by Feb 10, 2027. This page explains how the rules generally work and is not tax or legal advice. Rules change, so confirm with the state. Report an error.
Concierge
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