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Hotel And Lodging Tax In Iowa 2026: TOT Rates By City
Iowa is one of the few states where voters, not the city council, must approve a local hotel tax before it can exist, and its long-stay exemption runs a full 90 days instead of the usual 30.
August 28, 2026
7
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TL;DR
- Iowa applies a 5% state hotel and motel tax statewide, and cities can add a local hotel and motel tax of up to 7% on top of it.
- "Hotel tax," "lodging tax," "bed tax," "room tax," and "occupancy tax" all refer to the same charge Iowa calls hotel and motel tax.
- A city cannot adopt or raise its local hotel and motel tax without a public election; simple majority approval is required.
- Stays of more than 90 consecutive days are exempt in Iowa, one of the longest long-stay exemption periods in this cluster, and tax already paid for the first 90 days is not refundable.
- Several of Iowa's largest cities, including Des Moines, Cedar Rapids, Iowa City, and Dubuque, already charge the maximum 7% local rate.
- Iowa's Department of Revenue collects the state and local hotel and motel tax together on one combined return rather than two separate filings.
- Iowa's local option sales tax does not apply to hotel and motel rentals, so lodging isn't stacked with that additional local sales tax.
- At least 50% of a city's hotel and motel tax revenue must fund tourism, convention, or recreational facilities under state law.
How Iowa's Hotel and Lodging Tax Works
Iowa calls its lodging levy the hotel and motel tax, and it has two layers set entirely by statute. Iowa Code Chapter 423A imposes a 5% state hotel and motel tax on nearly every short-term stay, and lets a city or county add its own local hotel and motel tax of up to 7% on top of it.
Unlike most states in this cluster, Iowa does not let a city council adopt or raise a local hotel and motel tax on its own. Iowa Code § 423A.4 requires a public election, and the tax can only take effect on one of two dates each year, January 1 or July 1, with the city required to notify the Iowa Department of Revenue at least 45 days in advance. This voter-approval requirement is one reason Iowa's local rates cluster so tightly near the 7% statutory maximum: cities that go to the trouble of holding an election tend to ask for the full amount allowed.
The hotel and motel tax applies to hotels, motels, and other places that furnish sleeping accommodations to transient guests for less than the length of stay set by the long-stay exemption, covered later on this page.
Tax Rates and Extra Fees
Because Iowa's local hotel and motel tax requires a public vote to change, many of the state's largest cities have already settled at the 7% statutory ceiling.
| City / county | Rate | Notes |
|---|---|---|
| Des Moines | 7% | Local hotel and motel tax at the statutory maximum, plus the 5% state hotel and motel tax. |
| Cedar Rapids | 7% | Local hotel and motel tax at the statutory maximum. |
| Iowa City | 7% | Local hotel and motel tax at the statutory maximum. |
| Coralville | 7% | Local hotel and motel tax at the statutory maximum. |
| Dubuque | 7% | Local hotel and motel tax at the statutory maximum. |
| Sioux City | 7% | Revenue is split evenly between tourism promotion and the city's general fund. |
Iowa does not use a separate tourism improvement district or business improvement district layered on top of the hotel and motel tax the way some states do. Instead, state law already builds a tourism dedication directly into the tax itself: at least 50% of a city's hotel and motel tax revenue must fund the acquisition, construction, or operation of recreation, convention, cultural, or entertainment facilities, or the promotion of tourism and convention business, under Iowa Code § 423A.7. The remaining share can go to any lawful city purpose.
Because nearly every large Iowa city already charges the 7% maximum, a hotel doing business across several Iowa markets is less likely to encounter a surprise local surcharge than in a state where a district assessment stacks separately on top of the base rate.
Collection and Remittance
Guests pay Iowa's hotel and motel tax at checkout, but the property is legally responsible for collecting and remitting it. Iowa is unusual in this cluster because the Iowa Department of Revenue collects both the 5% state hotel and motel tax and each city's local hotel and motel tax together, on the same combined return, rather than requiring a separate filing for the local portion. Any business renting sleeping accommodations must hold a sales tax permit with the department and file hotel and motel tax returns on a quarterly basis.
Short-term rental platforms operating in Iowa, including Airbnb, have taken on collection and remittance responsibility for Iowa's hotel and motel tax in many cases, but a host or property manager listing across multiple platforms should still confirm coverage rather than assume every channel is filing correctly on their behalf.
Exemptions From Iowa's Hotel Tax
Iowa exempts a stay once the same person has rented lodging for more than 90 consecutive days, a threshold the state extended from 31 days effective July 1, 2020. Tax collected during those first 90 days is not refundable, even once the stay goes on to qualify for the exemption, so a hotel cannot retroactively refund tax already properly charged.
Because Iowa's exemption threshold is unusually long compared to many other states, a hotel accustomed to a 30-day rule elsewhere should not assume the same cutoff applies to an extended-stay guest in Iowa; using the wrong threshold either overcharges a guest who has genuinely reached 90 days or, more commonly, exempts a stay far too early.
Common Mistakes Hotels Make With TOT Compliance
- Applying a 30-day exemption instead of Iowa's 90-day rule. Iowa extended its long-stay exemption from 31 to 90 consecutive days in 2020; a property using a generic 30-day cutoff exempts guests who are still fully taxable under Iowa law.
- Assuming a local rate can change without a public vote. Iowa Code § 423A.4 requires a city election before a local hotel and motel tax can be adopted or increased, so a rate change can't simply be announced by council resolution the way it can in some other states.
- Filing state and local hotel tax separately. Iowa collects both on one combined return through the Department of Revenue; treating them as two separate filing obligations creates unnecessary reconciliation work.
- Missing the January 1 or July 1 effective-date rule. A newly voter-approved local rate can only take effect on one of those two dates each year, so a property needs to confirm the exact effective date rather than assuming the day after the election.
- Applying the local option sales tax to a hotel room. Iowa's local option sales tax does not apply to hotel and motel rentals; adding it on top of the hotel and motel tax overcharges the guest.
- Refunding hotel and motel tax retroactively for an extended stay. Tax properly charged during a guest's first 90 days is not refundable even after the stay qualifies for the long-stay exemption.
Where A PMS Fits Into TOT Compliance
This isn't really about software. It is about a 90-day exemption clock and a combined state-and-local filing structure that don't match what most other states in this cluster do. A property management system that tracks continuous length of stay automatically makes it far easier to apply Iowa's 90-day threshold correctly instead of relying on front desk staff to count manually, and configuring the state and local hotel and motel tax as one linked tax code, rather than two, mirrors how Iowa actually expects the combined return to be filed. Revenue reports by date range also help a property confirm collections match what's due on a quarterly Iowa Department of Revenue filing, and a booking engine that shows the full, tax-inclusive price upfront keeps long-stay guests informed about when their 90-day exemption will actually kick in.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does Iowa have a statewide hotel tax rate?
Iowa has a 5% state hotel and motel tax that applies everywhere, but cities and counties can add their own local hotel and motel tax of up to 7% on top of it, so the total rate still varies by location.
2. What is Iowa's hotel tax?
Iowa calls it the hotel and motel tax. It combines a flat 5% state rate with a local rate of up to 7% that a city can only adopt or raise after a public election.
3. What is Iowa's lodging tax?
Lodging tax is another name for what Iowa's own statute calls the hotel and motel tax; both terms, along with bed tax, room tax, and occupancy tax, refer to the same combined state-and-local charge.
4. How long does a guest have to stay in Iowa to be exempt from hotel tax?
More than 90 consecutive days. Iowa extended this threshold from 31 days to 90 days effective July 1, 2020, and tax paid during the first 90 days is not refundable.
5. Does Iowa require hotels to disclose the full price including taxes and fees before checkout?
No statewide all-in pricing law specific to lodging was found for Iowa as of 2026.
6. Who is responsible for filing and remitting Iowa's hotel tax?
The hotel or motel operator collects the tax from guests and remits both the state and local hotel and motel tax together, on one combined quarterly return filed with the Iowa Department of Revenue.
7. Why can't an Iowa city just raise its hotel tax by council vote?
Iowa Code § 423A.4 requires a public election with simple majority approval before a city can adopt or increase its local hotel and motel tax, and any new or changed rate can only take effect on January 1 or July 1.
