State Tax Incentives

The Iowa Falls Area Development Corporation will work in coordination with the appropriate agencies in maximizing the tax credits, exemptions and incentive programs available.  For a confidential review and analysis, contact our office and see the advantages of doing business in the Iowa Falls area.

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 the New Jobs Tax Credit & Enterprise Zone Tax Credit.

No Sales or 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.

No Property Tax on New Industrial Machinery and Equipment - Manufacturing machinery and equipment, as well as computers used to process data by insurance companies and financial institutions is exempt from property tax.  Pollution control equipment is eligible for exemption from property tax.

No Personal Property (Inventory) Tax - Personal property is not assessed for tax purposes.  In Iowa, personal property includes corporate inventories of salable goods, raw materials and goods-in-process.

No Sales & Use Tax - No sales tax is due on purchases of electricity/natural gas used in the manufacturing process.

Pollution Control or Recycling Property Tax Exemption - Pollution control and recycling equipment may be eligible for a property tax exemption.  Improvements to real property that are primarily used to control pollution of air or water, or primarily used for recycling, may qualify. An application must be filed for exemption.

Unemployment Insurance - Iowa has the lowest new employer unemployment insurance rate in the nation. The rate for all non-construction business is 1 percent for a three-year period until an experience rating is established. Iowa offers a zero rate for good experience; approximately 45 percent of Iowa employers are at a zero rate.

New Jobs Tax Credit - A business entering into an agreement under the state's training program and increasing its workforce by at least 10 percent - may qualify for this Iowa corporate income tax credit.  This credit is equal to 6 percent of the state unemployment insurance taxable wage base.  The credit for 2005 is up to $1,204 per new employee and can be carried forward up to 10 years.

Research & Development Tax Credit - A credit for increasing research activities is 6.5 percent of the company's allotted share of qualifying research expenditures in Iowa.  A company must meet the qualifications of the federal research activities credit in order to be eligible for the credit on the Iowa return.

Assistive Device Tax Credit - Iowa small businesses can reduce their taxes by buying or renting products or equipment, or by making physical changes to the workplace to help employees with disabilities get or keep a job.