Favorable Business Climate
Iowa currently had the lowest cost of doing business, and offers businesses distinct operational advantages. These programs and others create a positive and profitable business environment, making Iowa the smart choice for your business.
Iowa Corporate Income Tax
A number of features of Iowa's corporate income tax offer significant advantages when compared to other states' corporate taxes.
- Fifty percent deductibility of federal taxes from Iowa corporate income tax.
- Single-factor, non-unitary tax. Iowa's tax is based only on the percentage of total sales income within the state.
- Iowa corporate income tax may be reduced or eliminated by state tax cedit programs.
No Sales or Use Tax on Manufacturing Machinery and Equipment Purchases
No Sales or Use Tax on Purchase of Industrial Machinery and Equipment
There is no sales or use tax on purchase of industrial machinery, equipment and computers used for manufacturing or to process data by insurance companies, financial institutions or certain commercial enterprises.
No Sales Tax on Materials in Manufacturing Process
There is no sales tax on materials used in the manufacturing process or purchase of electricity, natural gas, propane or water used directly in the manufacturing process. Download the Sales Tax Exemption PDF.
No Property Tax on New Industrial Machinery and Equipment
Manufacturing machinery and equipment, as well as computers used to process data by insurance companies and financial institutions is exempt from property tax. Pollution control equipment is eligible for exemption from property tax.
No Personal Property (Inventory) Tax
Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of salable goods, raw materials and goods-in-process.
Refundable Research and Development Tax Credit
Iowa is one of only a few states in the nation to consistently offer a refundable research activities credit.
Iowa is a Right-to-Work State
Under Iowa law an employee may not be required to join a union or pay dues or fees to any labor union, association or organization as a condition of employment.
Iowa has one of the lowest, new employer, unemployment insurance rates in the nation. The rate for all non-construction businesses is 1.9% for a 3 year period until an experince rating is established. Iowa offers a zero rate for good experience; approximately 45% of Iowa employers are at a zero rate.
Workers' Compensation Cost
Iowa's workers' compensation costs are among the lowest in the nation. The average cost of workers' compensation insurance for manufacturers in Iowa is 25% lower than the national average.
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 application with the Iowa Department of Natural Resources (DNR) and other Iowa regulatory agencies. The mission of the Regulatory Assistance Program is to facilitate communication between the business and regulators and to expedite the permitting process.