Iowans are seeing a lower income tax rate in 2025. The new rate took effect yesterday, going down to three-point-eight percent for all taxpayers. That means Iowans now have the sixth-lowest state income tax rate in the country. It's the latest in a string of efforts by Iowa's legislature to bring down tax rates in the state, with the latest being signed by Governor Kim Reynolds last year. The rate is expected to save Iowans roughly one-billion dollars in taxes over the first two years.
While a lower income tax has come to Iowa, Iowans will be paying more to register their vehicles. An increase in vehicle registration fees went into effect yesterday, which will see drivers pay an extra ten dollars for a new registration. There's also a ten dollar increase for different applications, including a replacement copy of a title and a new title when transferring. Those applications will now cost 30 dollars instead of 20.
2025 Brings Lower Tax Rate, Higher Registration Fees For IA

Andrew Caballero-Reynolds
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