With your IRS Determination Letter in hand, make sure you familiarize yourself with
requirements for recognizing your nonprofit’s tax-exempt status. This is an area
vary state-by-state. Many states issue their own tax-exempt certificate that can be
used for sales
and use tax purposes, but it may require application and periodic renewal.
To file to obtain exemption from state income tax:
Your nonprofit is automatically exempt from Iowa income tax when you receive IRS income tax exemption.
More information: Iowa Department of Revenue
To file to obtain exemption from state sales tax:
Iowa nonprofits receive limited exemption from sales tax. Sales made to nonprofits are not exempt from sales and use tax. The exception is private nonprofit schools do not pay sales tax on the purchase of goods and taxable services used for educational purposes. Also, sales made by educational, religious, or charitable organizations are exempt on proceeds expended for qualifying educational, religious, or charitable purposes.