It's been one of the rainiest summers in Iowa history this year, but it isn't black Iowa mud that has mired Democratic gubernatorial candidate Roxanne Conlin's campaign to become the state's first woman governor, bringing it to a dead stop.

What's rained on her parade is the fact that she and her husband, James, are worth millions but paid no state income taxes last year.

Iowans generally are happy to ignore politics and politicians this time of year. But Conlin, 38, a former U.S. attorney for the Southern District of Iowa, found, to her sorrow, a way to capture the attention of nearly everyone.

On July 1 Conlin and her husband, a real estate developer and investment broker, voluntarily released a statement showing their net worth at an estimated $2.2 million. In addition, Conlin disclosed that they paid no state income taxes for 1981 and only $2,995 in unspecified "federal taxes."

With that disclosure, Conlin, who had been riding a crest of momentum from her easy victory in a three-way Democratic primary, found herself on the defensive and looking for ways to reduce her massive political losses to her Republican opponent, Lt. Gov. Terry Branstad, 35, a lawyer.

The latest Iowa Poll indicates that it cost her dearly. In May, she led Branstad 45 percent to 38 percent with 17 percent undecided. Now Branstad leads, 49 percent to 37 percent with 14 percent undecided.

At stake is the office now held by Republican Gov. Robert D. Ray, who is retiring rather than seek a sixth term.

Republicans have capitalized on the disclosure in several ways, including a new bumper sticker in Conlin's green and gold campaign colors that simply says, "Taxanne." In addition, they are pointing to her criticism of tax shelters in her first major address at the state party convention last month, shortly before disclosing her own tax shelters.

Ray called Conlin a "hypocrite," and Branstad released his federal and state income tax returns for the last three years to taunt Conlin for refusing to do the same.

But it isn't just the Republicans who are causing problems. Many Democrats are angry and refusing to contribute to her campaign.

"The biggest disappointment is that we thought we had a candidate who would win," one Democrat said. "It was our best shot in 14 years to win the governorship, and we just saw it go down the drain."

Conlin has categorically ruled out any possibility of withdrawing from the race.

But at a recent rally in Des Moines, a postal worker asked the question that has been uppermost for many Iowans.

"My wife and I made $42,000 last year and we paid $1,569 in state taxes and $9,343 in federal taxes. My question is, how do I support Roxanne Conlin as I have in the past?" the postal worker asked.

Conlin's response to the question was direct and simple despite her contention that her family's financial affairs are complex.

"I would have paid if I could have paid, but the losses we sustained made it impossible to pay state taxes," she said. "I hope I will pay taxes this year, but the fact is I earned $35,000 last year and all of that was eaten up by the losses in James' real estate business.

"They were cash losses--losses due to an economy that has turned sour, losses due to high interest rates . . . . Those are factors over which I have no control."

Conlin has attempted to "burn out" the issue by counterattacking and talking about the disclosure itself, which she contends is a "phony issue."

"It has nothing to do with whether I can govern or not," she said. "It is an issue my opponent wants to use because he doesn't want to talk about our bad economy, the problems of our elderly or how he will get jobs for out-of-work Iowans."

But she also refuses to give any further details about her disclosure, which leads to speculation that she and her husband have not paid state income taxes for several years.