What is the tax rate for a new car in Iowa?

Iowa Automobile Rental Tax

Description: This is an excise tax imposed on the rental of passenger vehicles designed to carry nine or fewer passengers that are rented for a period of 60 days or less. The tax is not imposed on delivery trucks, motorcycles, and motorized bicycles.

Tax Rate: 5% tax on the rental charge for certain vehicles. This is in addition to the state sales / use tax and local option tax, if any.

Distribution of Funds: Road Use Tax Fund

Due Date(s) of Returns: This excise tax is reported and remitted on a quarterly basis electronically through eFile & Pay. No permit other than an Iowa sales or use tax permit is required to collect this tax.