Iowa doesn't charge sales tax on a used car the way most states do. You pay a one-time "fee for new registration" instead, and it's $10 plus 5% of the purchase price, paid to the county treasurer when you title the car. As of Oct 19, 2026, that's the rule in Iowa Code 321.105A. A trade-in comes off the price first, a true gift is exempt, and you have 30 calendar days from the purchase to apply for title before a 10% penalty kicks in.
I read the 2026 Iowa Code sections on the fee and the title transfer, plus the Iowa DOT's registration page, on Oct 19, 2026. The fee works like a sales tax in practice, and dealers and county clerks will often call it one. Below is how the math and the exceptions work.
How to figure the fee
Section 321.105A says the fee is "ten dollars plus five percent of the purchase price," and that purchase price is figured the same way sales price is under Iowa's sales tax chapter. So on a $12,000 private-party car with no trade, you'd owe $10 plus $600, or $610, on top of the title fee and registration. Section 321.46 sets the title fee at $30 and says you also pay the annual registration prorated for the months left in the registration year.
One thing comes out of the price by law. A manufacturer's cash rebate is exempt as long as it's applied to the purchase price. Beyond that, "purchase price" follows Iowa's sales tax definition, so if a dealer's worksheet shows 5% on the full out-the-door total, ask what's in it and have them show you the line items.
The DOT points you to a fee calculator under Tools and Dealer Inquiry for an estimate, though it notes the tool doesn't work on phones. Your county treasurer has the final number.
Trade-ins, including the title-name trap
When you trade a car toward another, the trade-in value is excluded from the purchase price. On a $20,000 car with a $6,000 trade, the fee is $10 plus 5% of $14,000, or $710. The law covers trades to a dealer, and also trades between two private people where neither is a dealer.
It only works if the names match, though. Section 321.105A says the person on the title of the new car must be the same person on the title of the car traded in. There are exceptions: trades between spouses titled to one or both of them, trades between lineal family members (including adopted and step relationships) where one person from the old title is on the new one, trades involving an entity, and cases where a lender's cosigner rules put someone else's name on the new title. If your spouse owns the trade and you're buying alone, it still counts. If your roommate owns it, it doesn't.
Gifts, inheritances and other exemptions
The statute exempts a vehicle "transferred from one individual to another individual as a gift in a transaction in which no consideration is present." So a parent handing a car to a kid owes no 5% if no money changes hands, and also no loan payoff or other value goes back the other way. Vehicles transferred by operation of law (Section 321.47, which covers things like inheritance) and transfers into or out of a trust with no consideration are exempt too. Ask the treasurer's office what paperwork it wants to document a gift before you go in.
New residents get a break. A car you bought for use in your old state before moving to Iowa isn't charged the fee. If you bought it in another state and paid that state's sales or use tax, Iowa credits that, and you only pay the difference if the other state's tax was lower than Iowa's fee.
Deadline and penalties
Section 321.46 says the buyer has to apply for a new title and registration with any county treasurer within 30 calendar days after the purchase. Miss that, and 321.105A adds a penalty of 10% of the fee. Underpay because of wrong information on the application and it's a 5% penalty. Lying about the purchase price to dodge the fee is a fraudulent practice under the same section. Writing "$500" on a bill of sale for a $9,000 car is the classic way people get there.
Our Iowa private-sale title transfer guide covers the forms and signatures, and the general used car sales tax explainer compares how other states handle this.
Salvage and rebuilt cars
A car on a salvage certificate of title is exempt from the fee. When it's repaired and gets a regular title, the fee comes due on its fair market value, minus the cost of parts and supplies you bought to rebuild it and paid sales tax on. Keep the receipts, because without them the county has nothing to deduct. Our Iowa salvage and rebuilt title rules post covers the inspection side.
Before you pay 5% on any used car, it's worth knowing what you're buying. Run the VIN through NMVTIS for title brands, then a history report for accidents and mileage. CarVins is a licensed CARFAX and AutoCheck reseller with no affiliation to CARFAX, AutoCheck or Experian. In mid October 2026 reports cost us about $5.50 as a guest, $4.50 as a member and $6.75 for a bundle of both, while retail sits around $39.99 to $44.99. Confirm the final amount at checkout.
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