Iowa Tax Rate History

The first major state tax in Iowa was created in 1921 when the state passed a 2¢ per package tax on cigarettes. Iowa was the first state to pass a cigarette tax. In 1934 the sales and income taxes were created as property tax relief measures.

Since that time several significant changes have occurred, both in the tax base and in the tax rates of Iowa’s major revenue sources. While certain changes in a particular tax base may be of equal or greater importance than changes in the tax rate, the history of the key developments in a particular tax may often be identified through an examination of tax rate changes. Additional information regarding these changes may be obtained by contacting the Tax Research and Program Analysis Section of the Director’s Office.