BUSINESS ADVANTAGES
With the lowest cost of doing business, companies operating in Iowa benefit from
a business-friendly state government, technology transfer from world-renowned research
universities, a skilled and productive labor pool and a centralized geographical
location. Following is a brief description of the many business advantages companies
enjoy in Iowa.
Iowa is a Right to Work State
Iowa Corporate Income Tax
Iowa's Corporate income tax may be reduced or eliminated through Iowa's
Tax Incentive programs. Other advantages include:
Federal deductibility
50% deductibility of federal taxes from Iowa corporate income. Iowa is one of only
five states that offers this important deductible.
Single-factor, nonunitary tax
A single-factor, nonunitary tax-Iowa's tax is based only on the percentage of total
sales income within the state.
Unemployment Insurance Rate
The rate for all new non-construction business is 1.9% for a three-year period until an experience
rating is established. Iowa offers a zero rate for good experience; approximately
45% of Iowa employers are at a zero rate.
No Personal Property Tax
Personal property is not assessed for tax purposes. In Iowa, personal property includes
corporate inventories of goods-in-process, raw materials and salable goods.
No Sales and Use Tax on Manufacturing Machinery and Equipment Purchases
The purchase of industrial machinery and computers assessed as real property and
used for manufacturing or used to process data by insurance companies, financial
institutions, or certain commercial enterprises, is exempt from Iowa sales or use
tax. In addition, there is no sales tax on materials used in the manufacturing process
or for purchases of electricity or natural gas used directly in the manufacturing
process.
No Property Tax on New Industrial Machinery, Equipment and Computers
Manufacturing, machinery, equipment, and computers are exempt from property tax.
Research Activities Tax Credit
A refundable credit for increasing research activities is up to 6.5 percent of the
company's allotted share of qualifying research expenditures in Iowa. This can also
be doubled under certain programs.
Local Tax Abatement
Iowa law allows cities and counties to abate local property taxes for improving
industrial real estate.
Tax Increment Financing
City councils or boards of supervisors may use the property taxes resulting from
the increase in taxable valuation caused by the construction of new industrial or
commercial facilities to provide economic development incentives to a business.
Worker's Compensation
Iowa's worker's compensation costs are among the nation's lowest. The average cost
of worker's compensation insurance for manufacturers in Iowa is 25% lower than the
national average.
Regulatory Assistance
The Regulatory Assistance Program enhances the range of services available to Iowa
companies by advising and assisting companies in the preparation and submission
of permit applications with the Iowa Department of Natural Resources (IDNR) and
other Iowa regulatory agencies. The purpose of the Regulatory Assistance Program
is to facilitate communication between the business and regulators and to expedite
the permitting process.
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