Out-the-door price in Iowa
How Iowa works
- Iowa does not charge sales tax on a car. It charges a one-time fee for new registration instead: $10 plus 5% of the purchase price, the same in every county. It is paid with the title application, and the dealer can collect it at the sale and pass it to the county treasurer.
- Your trade-in reduces the price the 5% is figured on, new or used, with no dollar cap. It counts even if you still owe more than it is worth. The trade-in has to be titled in the same name or names as the car you are buying (trades between spouses, or between parents and children, also qualify), and it has to be a kind of vehicle the dealer sells.
- A manufacturer's cash rebate that is applied to the price reduces the 5%, and so does the dealer's own discount. A rebate paid on a manufacturer credit or debit card does not count.
- The 5% is figured on the price of the car, freight and dealer-installed accessories included. The doc fee is not part of it. An optional service contract or vehicle protection package is left out if it is listed separately on the contract.
- The doc fee is capped at $180 per vehicle. The cap is a fixed dollar amount and does not rise with inflation. Iowa law requires a dealer that charges it to include it in the price of the car and to state its full amount in any advertised price.
- Registration is a yearly fee set by the car's original list price and weight, not by what you paid. It renews every year in your birth month. At the sale you pay the months left until then, so the amount shown is the most you would pay.
- Optional service contracts that cover repairs carry Iowa sales tax (6% plus the 1% local option tax in most places) even though the car does not. The calculator adds an estimate of 7% on the finance-office box.
- Registering the car: the dealer can take your title and registration application and the government fees at the sale and send them to the county treasurer within 30 days, and it gives you a 45-day "registration applied for" card. If you do not use the dealer, you have 30 days to apply at any county treasurer's office. The fees are in the calculator's total because you pay them either way.
Rules last verified Oct 11, 2026. Our methodology.
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What an Iowa advertised price has to include
Iowa law requires a dealer that charges a documentary fee to include it in the price of the vehicle and to disclose its full amount in any advertised price, and the FTC expects every fee the dealer requires to be in the advertised price, so only government charges like the fee for new registration, title and registration can be added on top. That still isn't your out-the-door number; the calculator above adds the rest.
Federal law comes first
The FTC requires a dealer's advertised price to include every fee the dealer charges. Only charges the government requires you to pay, like tax, title and registration, can be left out. Where a state's rules let a dealer leave a fee out, the dealer still has to follow the federal rule, so the fee goes in. The FTC says a state's doc-fee rules can add disclosures, but they don't change the price that has to be advertised. Read the FTC's guidance.
Has to be in the advertised price
- The documentary fee (at most $180)
- Freight (destination) and dealer preparation charges
- Anything the dealer has added to the car
- Any other fee the dealer requires you to pay to buy the car
Can still be added on top
- The fee for new registration: $10 plus 5% of the purchase price
- The $35 title fee, the annual registration fee, and the $20 lien fee if you finance
- Optional products you choose to buy, such as a service contract or GAP coverage
- The documentary fee: Iowa caps it at $180 for each vehicle sold in a transaction. The cap is a fixed amount, not indexed to inflation. A dealer that charges it has to include it in the price of the vehicle and disclose the full amount in any advertised price and when making or accepting an offer.
- The notice: the purchase agreement has to carry a notice, in the statute's wording, that the documentary fee is not an official fee and is not required by law.
- Not part of the 5%: Iowa's fee for new registration is figured on the price without the doc fee, so the doc fee does not raise it.
- Enforcement: a violation of the doc fee section is an unlawful practice under Iowa's Consumer Fraud Act, which the Attorney General enforces.
- Pending: a 2025 bill (HF 758) would have removed the $180 cap. A House subcommittee recommended passage on March 25, 2025 and the bill had no further action as of October 2026, so the cap stands.
More in our guide: Do dealers have to put fees in the advertised price? What actually changed for 2026
Iowa in detail
Iowa OTD questions, answered
Does a trade-in reduce sales tax in Iowa?
Yes — Iowa taxes the difference: your trade-in's value is subtracted before tax is computed.
Are manufacturer rebates taxed in Iowa?
No — rebates passed to you are treated like a cash discount and reduce the taxable amount.
Is the doc fee capped in Iowa?
Yes — the cap is $180.00 (Iowa Code 322.19A(2): $180 per vehicle sold in a transaction; fixed, not CPI-indexed. 322.19A(3): the fee must be in the price and in any advertised price.). A dealer may not exceed it.
What does an Iowa dealer's advertised price have to include?
Every fee the dealer requires, including the doc fee, which Iowa law itself puts in the price of the vehicle (the FTC expects the same). Only government charges such as the fee for new registration, the title fee and registration can be added on top.
Is there a cap on the doc fee in Iowa?
Yes. Iowa Code 322.19A allows no more than $180 for each vehicle sold in a transaction. It is not adjusted for inflation.
Do I pay sales tax on a car in Iowa?
No. Iowa charges a one-time fee for new registration instead: $10 plus 5% of the purchase price, paid when the car is titled. Optional service contracts are the exception and carry sales tax.
Who collects the fee for new registration?
The county treasurer collects it with your title application. The dealer can collect it from you at the sale and forward it with the application.