Right To Work State
Iowa is a Right-to-Work state offering maximum labor flexibility. A “right-to-work” law is a statute in the United States that prohibits agreements between labor unions and employers, that govern the extent to which an established union can require employees’ membership, payment of union dues, or fees as a condition of employment, either before or after hiring.
Iowa Corporate Income Tax
Iowa’s corporate income tax structure offers significant advantages including:
- 50% deductibility of federal taxes from Iowa corporate income. Iowa is one of only five states that offers this important deductible.
- A single-factor, nonunitary tax – Iowa’s tax is based only on the percentage of total sales income within the state.
- Iowa’s corporate income tax can also be reduced or eliminated by the New Jobs Tax Credit, High Quality Job Creation Program or Enterprise Zone benefits
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 And Development Tax Credit
A refundable credit for increasing research activities is up to 6.5% of the company’s allotted share of qualifying research expenditures in Iowa. This can also e doubled under certain programs.
Other Local Incentives
Several state, county and city financial incentives are also available. See our incentives page for more information.
Source: Iowa Department of Economic Development