# Iowa Code § 421.7: Interest rate

> Iowa · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.7

## Section

- **Citation:** Iowa Code § 421.7
- **Heading:** Interest rate
- **Jurisdiction:** Iowa
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** IA Code / Title X / Chapter 421 / Section 421.7

## Text

(1) Except where a different rate of interest is stated in a provision of this Title,* the rate of interest on interest-bearing obligations arising under this Title shall be the rate of interest in effect under this section.

(2) The rate of interest that shall be in effect during a calendar year shall be the rate which is two percentage points greater than the numerical average, rounded to the nearest one percent, of the respective prime rates for each of the months in the twelve-month period that ends September 30 of the previous calendar year. The rate of interest established by this subsection takes effect January 1, and applies to any amount which is due or becomes payable on or after that date.

(3) Notwithstanding contrary provisions of subsection 2, the rate of interest that is in effect during a calendar year shall also be the rate of interest to be in effect for the following calendar year, unless the rate of interest as calculated under subsection 2 is at least one percentage point higher or lower than the rate then in effect.

(4) In the event interest accrues or is calculated on a monthly basis, the rate of interest for each month shall be one-twelfth, rounded to the nearest one-tenth of one percent, of the rate specified in subsection 2.

(5) As used in subsection 2, the term “prime rate” means the prime rate charged by banks on short-term business loans, as determined by the board of governors of the federal reserve system and published in the federal reserve bulletin.

(6) In November of each year the director shall cause an advisory notice to be published in the Iowa administrative bulletin and on the internet site of the department, stating the rate of interest to be in effect on or after January 1 of the following year, as established by this section. The calculation and publication of the rate of interest by the director is exempt from chapter 17A.

[S13, §1481-a23; C24, 27, 31, §7310, 7368; C35, §6943-f20, -f21, -f24, 7310, 7368; C39, §6943.056, 6943.057, 6943.060, 7310, 7368; C46, 50, 54, §422.24, 422.25, 422.28, 450.6, 450.63; C58, 62, §324.64, 422.24, 422.25, 422.28, 450.6, 450.63; C66, §324.64, 422.16(9)(10, b), 422.24, 422.25, 422.28, 422.58, 423.18, 450.6, 450.63; C71, 73, 75, §324.65, 422.16(9)(10, b), 422.24, 422.25, 422.28, 422.58, 423.18, 450.6, 450.63; C77, §324.65, 422.16(9)(10, b)(11, e), 422.24, 422.25, 422.28, 422.58, 423.18, 450.6, 450.63, 450.94; C79, §324.65, 422.16(9)(10, b)(11, e), 422.24, 422.25, 422.28, 422.58, 422.88, 423.18, 435.4, 435.6, 450.6, 450.63, 450.94, 450A.9; C81, §324.65, 422.16(9)(10, b)(11, e), 422.24, 422.25, 422.28, 422.58, 422.88, 422.91, 423.18, 435.4, 435.6, 450.6, 450.63, 450.94, 450A.9; 81 Acts, ch 131, §1]86 Acts, ch 1007, §16; 90 Acts, ch 1172, §5; 94 Acts, ch 1023, §48; 2013 Acts, ch 70, §17; 2021 Acts, ch 86, §74; 2022 Acts, ch 1061, §57

## Nearby sections

- [Iowa Code § 421.1 State board of tax review.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.1.md)
- [Iowa Code § 421.1A Property assessment appeal board.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.1A.md)
- [Iowa Code § 421.2 Department of revenue.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.2.md)
- [Iowa Code § 421.3 Director to have no conflicting interests.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.3.md)
- [Iowa Code § 421.4 Deputies.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.4.md)
- [Iowa Code § 421.5 Settling claims for taxes, penalties, and interest abatement.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.5.md)
- [Iowa Code § 421.6 Definition of return.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.6.md)
- [Iowa Code § 421.7 Interest rate.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.7.md)
- [Iowa Code § 421.8 Penalty for defective return under certain circumstances.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.8.md)
- [Iowa Code § 421.9 Duties and powers — office.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.9.md)
- [Iowa Code § 421.9A Due dates and holidays.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.9A.md)
- [Iowa Code § 421.10 Appeal period applicability.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.10.md)
- [Iowa Code § 421.14 Rules — director’s duties.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.14.md)
- [Iowa Code § 421.15 Seal.](https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.15.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_IA_TX_C421_S421.7. Check the current official text before relying on it. Not legal advice.