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    Iowa Proposes Cash Rounding Legislation (2026)

    Iowa Legislature

    Published: February 1, 2026
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    Source Overview

    Iowa proposed cash rounding legislation in February 2026, building on the administrative guidance issued by the Iowa Department of Revenue in November 2025. Status: Proposed (not law). **Rounding Scope:** - Rounding applies to final transaction total - Cash transactions only **Tax Treatment:** - Tax calculated before rounding - Aligns with prior Iowa DOR guidance

    Key Takeaways

    • Status: Proposed (not law)
    • Builds on Iowa DOR guidance issued November 2025
    • Rounding applies to final transaction total
    • Tax calculated before rounding
    • Applies to cash transactions only

    Our Two Cents

    Iowa's legislative proposal represents a natural progression from its earlier administrative guidance, potentially providing a clearer legal framework for retailers already following DOR recommendations.

    Open Questions

    • ?How will this legislation differ from the existing DOR guidance?
    • ?Will it include enforcement or audit provisions?
    • ?How will it address refund handling?

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