Credit card processing and merchant services in Des Moines, IA
Des Moines voters approved a 1% local option sales tax in 2019, so most taxable sales in the city carry 7%. Groceries, gas and prescription drugs fall outside it.
Des Moines added its own penny in 2019. In March of that year, 70% of the city's voters approved a 1% local option sales tax, and collection began on July 1, 2019. On top of Iowa's 6% state rate, that puts most taxable sales in the city at 7%.
The city's own page on the tax is worth reading before you set up a register. It says the tax doesn't apply to things such as groceries, gas or prescription drugs, as determined by the Iowa Department of Revenue. A convenience store or pharmacy can ring up 7% items and untaxed items in the same basket, so map every product to the right tax category on your POS terminals before opening day, not after a customer questions a receipt.
The Census Bureau's July 1, 2025 estimate puts Des Moines at 212,086 residents, about 0.9% below its April 2020 base. When the customer count holds flat, margin has to come from the cost side, and card processing is one cost you can cut without touching your prices.
Surcharge rules come from Iowa, which means they come from the card networks. We found no Iowa surcharge statute, so the limits are Visa's 3%, Mastercard's 4% and your own cost, with nothing allowed on debit or prepaid cards. Our Iowa page lists the sources.
Before you add a fee, look at what you already pay. On interchange-plus pricing, a debit sale costs its interchange, network fees and our disclosed markup, a premium rewards card costs more, and your statement shows the difference card by card. A free statement review puts your current bill through that breakdown.
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Common questions
What is the sales tax rate in Des Moines?
7% on most taxable sales: Iowa's 6% state rate plus the 1% local option sales tax that Des Moines voters approved in March 2019. The city began collecting it on July 1, 2019, and says it doesn't apply to groceries, gas or prescription drugs.
Why does a Des Moines receipt show tax on some items but not others?
Because the local option tax follows the state's taxable base. The City of Des Moines says the 1% doesn't apply to items such as groceries, gas or prescription drugs, as determined by the Iowa Department of Revenue. If your register adds 7% to something the state treats as an untaxed grocery item, that product's tax category is set wrong.
Do I charge 7% at a store outside Des Moines?
Only if that city or county also has Iowa's 1% local option tax. The Department of Revenue says the extra 1% applies to most taxable sales in the state, but it depends on local adoption, and the department posts updates when new jurisdictions start collecting. Check each address instead of copying your Des Moines settings.
Can a Des Moines shop pass its card fees on to customers?
Yes, within the networks' limits, since Iowa has no surcharge law: up to 3% on Visa and 4% on Mastercard, never above your cost, and never on debit or prepaid cards. Visa also wants 30 days' written notice to your acquirer. A cash discount program is the other route, and our surcharging program covers the disclosures if you surcharge.
Disclaimer: general information, not professional advice
This page is general educational information, not legal, tax, accounting or financial advice. Rules and rates vary by place and change, so confirm them with the official source and a qualified professional before you act. Full terms are in our Terms of Service.
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