Iowa imposes a tax on all tobacco products in the state and on any person engaged in business as a distributor of tobacco products. The tax is imposed at the time the distributor: brings, or causes to be brought, into Iowa tobacco products for sale; makes, manufactures, or fabricates tobacco products in Iowa for sale in the state; or ships or transports tobacco products to retailers in Iowa, to be sold by those retailers. Consumers who use or store untaxed tobacco products in the state are also liable for the tax.
The tax on tobacco products is in addition to all other occupation or privilege taxes or license fees now or hereafter imposed by any city or county. However, for the purpose of equitable and uniform implementation, application, and enforcement of state and local laws and regulations, the provisions of Iowa Code ch. 453A shall supersede any local law or regulation which is inconsistent with or conflicts with the provisions of the chapter.
The tax on tobacco products is 50% of the wholesale sales price of the products, except that the total tax on cigars may not exceed $0.50 per cigar, and the tax on snuff is $1.19 per ounce and a proportionate tax on all fractional parts of an ounce.
On or before the 20th day of each month, every licensed in-state or out-of-state distributor must file a Tobacco Products Monthly Tax Return (Form 70-022 for in-state distributors and Form 70-026 for out-of-state distributors), along with payment for taxes due.
“Smoking” means inhaling, exhaling, burning, or carrying any lighted cigar, cigarette, pipe, or other tobacco product in any manner or in any form. “Smoking” does not include smoking that is associated with a recognized religious ceremony, ritual, or activity, including but not limited to burning of incense.
“Tobacco products” means cigars, little cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, or refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking, but does not mean cigarettes.
“Sale” means any transfer, exchange, or barter, in any manner or by any means whatsoever, for a consideration, and includes and means all sales made by any person. It includes a gift by a person engaged in the business of selling tobacco products, for advertising, as a means of evading the provisions of this division, or for any other purposes whatsoever.