Iowa's numerous tax benefits will ensure your business has every oportunity to achieve profitability and productivity.
Single-Factor Nonunitary Tax
Iowa's corporate income tax is a single-factor, nonunitary tax and is based only on the percentage of total sales income within the state. An Iowa manufacturer selling all its products outside Iowa pays no Iowa corporate income tax.
Iowa is one of only five states that offers Federal Deductibility. This allows 50% deductibility of federal taxes on corporate income tax in Iowa.
What You Won't Pay Taxes On
- no sales or use tax on industrial machinery/equipment/computers
- no sales tax on purchases of electricity or natural gas used directly in the manufacturing process
- no sales or use tax on computer/peripherals used in the processing or storage of data
- no property tax on manufacturing machinery/equipment/computers
- no tax assessment on personal property (includes corporate inventories of salable goods, raw materials, and goods in process)
Tax Reduction Programs
These tax reduction programs, available through the State of Iowa, may help your company experience higher profitability: Research and Development Tax Credit; New Jobs Tax Credit; High Quality Job Creation Program; and Enterprise Zones.
Tax Increment Financing:
City councils or boards of supervisors may use the property taxes resulting from the increase in taxable valuation cause by the construction of new industrial or commercial facilities to provide economic development incentives to a business.
Local Tax Abatement:
Iowa law allows cities and counties to abate local property taxes for value added to industrial real estate.
Pollution Control or Recycling Property Tax Exemption:
Improvements to real property that are primarily used to control pollution of air or water, or primarily used for recycling, may qualify for a property tax exemption.