Information taken from http://www.iowa.gov/tax/educate/78595.html 7/5/2012
Gambling receipts are subject to sales tax, regardless of the ultimate use of the proceeds. Nonprofit organizations and churches that conduct games of skill, games of chance, raffles, bingo, and other games are required to obtain a gambling license and sales tax permit.
To obtain a gambling license, see Social & Charitable Gambling on the Iowa Department of Inspections & Appeals Web site.
To obtain a sales tax permit, complete the Business Tax Registration form on the Iowa Department of Revenue Web site.
Gambling Activities Exempt:
- raffles conducted by agricultural fairs
- gambling activities by cities or counties
Gambling receipts include charges paid to participate, admissions, and ticket sales. Sales tax is computed on the entire gross receipts without any deductions.