The Complete Guide to Iowa Business Licenses
Iowa does not have a general business license. Most businesses register with the Department of Revenue for sales tax and withholding, contractors register with the state, and cities license only specific activities. This guide explains each step for a new Iowa business.
Step 1: Form the LLC
File a Certificate of Organization with the Secretary of State through Fast Track Filing for $50. Iowa LLCs file a biennial report ($30 online) between January 1 and April 1 of each odd-numbered year. See the Iowa LLC guide for every formation step.
Step 2: Free sales tax permit
Register through GovConnectIowa with the Iowa Department of Revenue. The sales and use tax permit is free, and permanent permits do not need renewing each year. The state rate is 6%, and most cities and counties add a 1% local option tax. The same combined registration sets up employer withholding.
Step 3: City licenses
Iowa cities license specific activities rather than every business. In Des Moines, the City Clerk issues licenses for activities such as alcohol, tobacco, transient merchants, mobile food, pawn and peddlers. Check zoning and occupancy rules with your city.
Step 4: Contractor registration and professional licenses
Anyone earning $2,000 or more a year in construction must register with the state (Iowa Code chapter 91C) through the Department of Inspections, Appeals and Licensing (DIAL). The registration fee is $50 a year. DIAL also oversees many professional licenses.
Hiring staff
Employers register for withholding with the Department of Revenue and for unemployment insurance with Iowa Workforce Development through MyIowaUI.
Checklist
| Registration | Agency | Cost |
|---|---|---|
| Certificate of Organization | Secretary of State | $50; $30 biennial report |
| Sales tax permit | Department of Revenue (GovConnectIowa) | Free |
| Contractor registration | DIAL | $50 a year, if $2,000+ in construction |
| City activity licenses | Your city | Set locally |
Frequently Asked Questions
Does Iowa require a business license?
No. Iowa does not have a general business license. Sellers get a free sales tax permit, contractors register with the state, and cities license specific activities.
How much is a sales tax permit in Iowa?
It is free. Register with the Iowa Department of Revenue through GovConnectIowa; permanent permits do not need yearly renewal.
Do contractors need to register in Iowa?
Yes, if they earn $2,000 or more a year in construction. Registration with DIAL costs $50 a year.
How much does it cost to form an LLC in Iowa?
The Certificate of Organization costs $50, and the biennial report is $30 online.
Do I need a business license in Des Moines?
Only for specific activities such as alcohol, tobacco, mobile food or peddling. Des Moines has no general business license.