Local Tax Incentives

Commercial & Industrial Tax Abatement - Iowa law allows cities and counties to abate local property taxes for value added to industrial real estate.  The maximum amount of actual value added at a new or expanded facility, which is eligible to be exempt from taxation is: Year One: 100%, Year Two: 100%, Year Three: 100%

Enterprise Zones - Business locating or expanding in an Enterprise Zone may receive the following tax benefits:

  • Property tax exemptions on all or part of the costs of improvements to land and buildings for up to 10 years.
  • An investment tax credit of up to 10% on corporate income taxes for investments in machinery and equipment, land, buildings, and improvements to existing buildings.
  • Refund of sales, services, or use taxes paid to contractors or subcontractors during construction.
  • A 13% research and development activities credit (refundable) on corporate income taxes.
  • Supplemental new jobs training withholding credit of 1 1/2% of the gross wages. This credit is in addition to, and not in lieu of, the withholding credit of 1 1/2% authorized for the Iowa New Jobs Training Program.

Tax Increment Financing - City councils or county 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 or industry.  Tax Increment Financing may be used to offset the cost of public improvements and utilities that will serve the new private development, to finance direct grants or loans to a company, or to provide the local match for federal or state economic development assistance programs.

LOCAL TAX STRUCTURE

Property Taxes - The current property tax rates payable in fiscal year 2005. Commercial properties are taxed at 97.77%, Industrial properties 100%, and Residential 47.67%.  City of Iowa Falls 2005 - 2006: $38.69 per $1000 of assessed valuation.

Local Sales Taxes - 2% Local Tax, used for improvements and new construction of public schools and roads (1% Local Option Sales Tax & 1 % School Local Option Tax).