Iowa's Business Advantages
Iowa currently had the second lowest cost of doing business, and offers businesses distinct operational advantages. Construction costs are 18% below the national average and industrial rental rates are 15% below the national average. 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 credit programs.
Property and Sales or Use Tax
- No personal property tax for corporate inventories of goods-in-process, raw materials or salable goods.
- No property tax on industrial machinery, equipment or computers.
- No sales or use tax on purchases 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 used in the manufacturing process or purchases of electricity or natural gas, propane or water used directly in the manufacturing process. Download the Sales Tax Exemption PDF.
Refundable Research and Development Tax Credit
The credit offers up to 6.5 percent of the company’s qualifying research expenditures in Iowa.
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.
Workers' Compensation Cost
Iowa's workers' average workers compensation premium is 4% below the national average. The average cost of workers' compensation insurance for manufacturers in Iowa is 11% 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.