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Iowa Corporate Tax Exemption

 

STEPS TO APPLYING FOR TAX EXEMPTION IN IOWA

What kind of tax exemption is my Iowa nonprofit corporation eligible for?

If your nonprofit organization has qualified for tax exemption from the Internal Revenue Service, it will be automatically exempt from paying Iowa income tax.

Do nonprofit corporations in Iowa have to pay state sales tax?

Yes, in most situations. In Iowa, nonprofit entities, even if they have qualified for federal tax exempt status, are treated the same as individuals for sales and use tax purposes. However, purchases made for resell are exempt from all sales taxes, even if a nonprofit corporation does not have a sales tax permit. There are also several types of nonprofit corporations specifically exempted from sales and use tax under Iowa law.

What kinds of specific nonprofit organizations are exempt from paying Iowa sales and use tax?

The following is a list of IA nonprofit entities specifically exempt from paying sales and use tax under Iowa law:

  • American Red Cross
  • Navy Relief Society
  • United Service Organizations
  • Migrant health care centers
  • Residential and intermediate care facilities for the mentally retarded or mentally ill
  • Residential facilities for child foster care
  • Rehabilitation facilities for persons with disabilities
  • Community mental health centers
  • Sales of personal property made to nonprofit hospitals and hospices
  • Nonprofit legal aid organizations
  • Statewide nonprofit organ procurement organizations
  • Nonprofit museums
  • Habitat for Humanity in Iowa
  • Toys for Tots
  • Community action agencies
  • Substance abuse treatment or prevention facilities

Iowa Tax Information:

Iowa Taxes

501(c)3 Registration

INCOME TAX PROCESSING
Iowa Department of Revenue
Hoover State Office Building
Des Moines IA 50319-0120
Phone: 515-281-3114
Website: www.iowa.gov/tax

This comprehensive guide to obtaining and maintaining 501c3 status from the IRS includes information on how to prepare your nonprofit to apply for 501c3 status, as well as information about the forms and fees required by the IRS.

This guide overviews and includes the special tax-exempt language a 501c3 nonprofit organization must include as part of its articles of incorporation. 

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