Happy New Year! Here's a new tax. That's the reality Iowans will be facing this month as we pay more for things like online subscriptions, purchases, and ride-sharing services.

Iowa's sales tax on the internet officially began as of January 1st. In 2018 the state legislature rewrote the Iowa tax code. They slashed income taxes by some $2 billion. But in doing so, they also changed and expanded tax laws for some online purchases and services. Previously, Iowa only collected state sales tax online if the retailer had a brick and mortar location within the state. For example, Target online purchases would be subject to sales tax, but eBay purchases would not.

Now, Iowa will collect state sales tax if the retailer sells $100,000 in services or make at least 200 separate transactions. That covers some fairly popular online retailers. Netflix, Amazon, Uber, and Lyft services will now all be charged the 6% Iowa sales tax. The increase won't be too painful. The tax translates to $1.20 to a $20 Uber ride, or around 66 cents added to a $10.99 Netflix subscription.


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