Some patients can develop an allergic reaction to iodine (rash; hives; itching; difficulty breathing; tightness in the chest; swelling of the mouth, face, lips, or tongue). Others can end up with a chemical burn if the iodine is used in higher concentrations. In your case the tick bite itself could end up in skin inflammation and infection that could give a similar picture. In case it appears like a chemical burn, then one should treat it like a burn.