Business Climate
Expanding or new businesses coming into the Cedar Valley Region may be eligible for reduced industrial land price, property tax abatement, job training and various state programs. Local and State programs vary by community and project. Custom proposals are prepared based on a company’s facility parameters, capital investment, jobs created or retained, and wage rates.
Contact us for a confidential proposal. Read on to learn more about Iowa’s tax structure and incentive programs.
Iowa Tax Structure
Corporate Income Tax
- Iowa's corporate income tax is a single-factor, non-unitary tax and based only on the percentage of total sales income within the state of Iowa. There is no state corporate tax on Iowa property or Iowa payroll (i.e. an Iowa manufacturer selling all its products outside Iowa pays no Iowa corporate income tax).
- In addition, Iowa allows 50 percent federal tax deduction if an Iowa company is subject to paying Iowa corporate income tax. Iowa is one of only five states that offers a federal deductibility.
Tax Advantages
- No sales or use tax on industrial machinery, equipment and computers
- No sales tax on purchases of electricity or natural gas used directly in the manufacturing process.
- No sales tax on purchases of electricity used directly for qualifying data centers.
- No sales or use tax on computer and peripherals used in the processing or storage of data
- No property tax on manufacturing machinery, equipment and computers
- No tax assessment on personal property (includes corporate inventories of salable goods, raw materials and goods in process)
Unemployment Insurance Rate
Iowa has the lowest new employer unemployment insurance rate in the nation. The rate for all non-construction business is 1% 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.
Right-To-Work
Iowa is a right-to-work state. Employees cannot be forced to join a union or financially support a union as a condition of employment.
Incentives
“Site Selection is a process we take pretty seriously. Economic development officials made a favorable sales pitch to the company. At the end of the day, the Cedar Valley simply won out.” Don Swain
Manager of Real Estate Development
Ferguson Enterprises/ Wolseley North American Division
Counties and Communities Incentives
- Tax Increment Financing (TIF)—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.
- Local Tax Abatement—Iowa law allows cities and counties to abate local property taxes for value added to industrial real estate.
- Direct Financial Assistance—Counties and communities in the region have access to a variety of local and regional business growth incentive tools including revolving loan funds and local development corporation funds.
State of Iowa Incentives
The Iowa Values Fund is the state's premier economic development program designed to transform Iowa's economy by creating high quality jobs through business development and expansion across Iowa. A variety of business development programs are available through the Iowa Values Fund.
Employee Training Assistance
The
community colleges serving the region provide an array of employee training resources to help businesses maintain a competitive edge and administer the State of Iowa jobs training assistance programs including:
- Iowa New Jobs Training Program (260E)—Provides no cost-or reduced-cost job training services to new employees of eligible businesses. The assistance can be used for basic skills training to highly specialized, customized training. Businesses entering into an agreement may also qualify for Ne w Jobs Tax Credit.
- Iowa Jobs Training Program (260F)—Provides job training services to current employees of eligible businesses that are located in Iowa. The assistance can be used to train workers to learn new technologies, upgrade existing skills and enhance productivity in a variety of ways.