Iowa

Moving from Montana to Iowa would RAISE your total state and local tax burden from 10.1% of income to 11.2% of income — an increase of +1.1 pts. On a $100K household budget, that is roughly $1100 more per year in combined state and local taxes.

Iowa top marginal income tax rate is 3.80%, versus 5.9% in Montana. Compare across your expected income bracket — top rates kick in at different thresholds in each state.

Iowa state sales tax is 6.00%. With average local add-ons, the combined rate is 6.94%. This applies to most retail purchases but rules on groceries, prescriptions, and services vary.

Iowa median effective property tax rate is 1.52% of home value. On a $400,000 home, that is roughly $6,080/year. Property tax typically funds schools, municipalities, and county services — rates vary sharply within a state by school district.

Iowa has NO state estate tax and NO state inheritance tax. Heirs are subject only to federal estate tax (over $13.99M in 2025). This is favorable for wealth transfer.

In Iowa: Social Security is not taxed. Pensions and 401(k)/IRA withdrawals are not taxed.

Iowa capital gains treatment: Flat 3.80% rate (2025). Prior farm/small business exclusions repealed.. Compare to federal long-term capital gains rates (0%, 15%, or 20%) — some states offer preferential treatment for long-term holdings, while others tax capital gains as ordinary income.

Iowa gas tax is 30.0¢/gal — 3.8¢/gal lower than Montana's 33.8¢/gal. For a 15,000 mile/year driver getting 25 mpg, each 1¢/gal of gas tax = about $6/year.

Iowa allows local income, occupational, or earnings taxes. Many school districts impose 0-20% surtax on state income tax liability. These are often overlooked but can add 1–3% to your effective rate.

Iowa residency rules: Domicile + 183-day statutory residency. To establish residency for tax purposes, typical steps include: update driver's license and vehicle registration, register to vote, file a homestead declaration, close home-state bank accounts where possible, and spend clearly more than 183 days in your new state. If your former state is aggressive (e.g., CA, NY, NJ, OR), keep documentation of every day spent in each state.

Iowa recent tax law changes: Flat 3.80% rate effective 2025 (down from graduated 6.0% top in 2022). Inheritance tax fully repealed 2025. All retirement income exempt since 2023.

For the most current tax information in Iowa, visit the official source at https://revenue.iowa.gov/. Tax laws change annually; verify rates and rules before making a permanent move. Consult a CPA for advice specific to your situation.