In today’s world, being in a position to take advantage of opportunities is what life is all about.  The Mid Iowa region provides the economic and business climate that is proactive in the development, expansion and retention of business & industry. 

Regional Tax Incentives (may vary by city/county)

- Commercial & Industrial Tax Abatement: Iowa law allows cities and counties to abate local property taxes for value added to industrial real estate.

- 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.

State Tax Incentives

- Iowa Corporate Income Tax: A number of features of Iowa’s corporate income tax offer significant advantages when compared to other state's 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

- No Property Tax on New Industrial Machinery and Equipment

- No Personal Property (Inventory) Tax

- No Sales & Use Tax

- 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.

The Mid Iowa Growth Partnership will work in coordination with the appropriate agencies in maximizing the tax credits, exemptions and/or incentive programs available.  For a confidential review and analysis, contact our office at (515) 602-6760 and see the advantages of doing business in the Mid Iowa region.