Iowa City, IA Short-Term Rentals: Taxes & Fees (2026)

Iowa's hotel/motel tax framework is centralized at the state level. (1) Iowa Code §423A.3 imposes a 5% state hotel and motel tax on the rental of any sleeping room for periods of 31 consecutive days or less, applicable to hotels, motels, inns, B&Bs, and short-term residential rentals booked through Airbnb, VRBO, and similar platforms. (2) Iowa Code §423A.4 authorizes cities and counties to impose a local hotel and motel tax of up to 7% on the same base. Iowa City has adopted the maximum 7% local rate by ordinance, and Johnson County does not stack an additional county hotel tax inside the Iowa City corporate limits. Combined state-plus-local rate in Iowa City is 12%. The Iowa Department of Revenue administers both taxes - operators do not register separately with the city; they register on GovConnectIowa, file a single Iowa Hotel and Motel Tax Return on a quarterly basis (monthly for high-volume), and the state remits the local portion back to Iowa City. Stays of more than 31 consecutive days by the same guest are EXEMPT. Iowa Code §423A.5 also provides that the state and local hotel/motel tax does NOT apply to renewal stays of the same lodging by the same person for periods exceeding 31 consecutive days, and to certain governmental and educational uses. Airbnb has a statewide voluntary collection agreement with Iowa, so Airbnb-booked stays in Iowa City have both the 5% state and 7% local rate remitted automatically by Airbnb; VRBO and direct bookings remain the host's responsibility. Local-option sales tax (LOST) does NOT apply to lodging because §423A.3 is exclusive on lodging-base tax.