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. (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 percent deductibility of federal taxes on corporate income tax in Iowa.
- Iowa corporate income tax may be reduced or eliminated by state tax credit programs.
Property and Sales or Use Taxes
- 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 used directly in the manufacturing provess.
Unemployment Insurance Rate
Iowa has the lowest new employer unemployment insurance rate in the nation. The rate for all non-construction business is 1.9% 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.
For more information on Iowa’s tax advantages, visit the Iowa Department of Economic Development’s website.