Taxes
Corporate Income Tax
A number of features of Iowa's
corporate 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 and the Enterprise Zone Tax Credit.
High
Quality Job Creation Program (HQJCP) - The High Quality
Job Creation Program provides qualifying businesses tax credits
to off-set the cost incurred to locate, expand or modernize
an Iowa facility. To qualify for this very flexible assistance
package that includes tax credits, exemptions and/or refunds,
a business must be a non-retail or non-service business and
meet at least four of the eligibility requirements.
ELIGIBILITY REQUIREMENTS
- Offer a pension or profit sharing
plan for all employees.
- Produce value-added goods or
be in one of 11 targeted industries.
- Provide medical and dental
insurance and pay 80% of the premiums.
- Offer child care services.
- Invest at least 1% of pretax
profits in research and development.
- Invest at least 1% of pretax
profits in worker training.
- Have active productivity and
worker safety improvement program(s).
- Purchase and occupy a vacant
building which is at least 20,000 square feet.
- Must meet wage threshold requirements.
Please contact
The Alliance to determine eligibility or to obtain information
specific to your needs.
New Jobs
Tax Credit - A
business entering into an agreement under the Iowa New Jobs
Training Program and increasing its Iowa workforces by a least
10 percent will qualify for this Iowa corporate income tax credit.
This tax credit is equal to up to 6 percent of the state's unemployment
insurance taxable wage base. The maximum credit for 2006 is
$1,278 per new position created. The credit may be taken only
once; however, unused credits can be carried forward for up
to 10 years. Please contact The Alliance
to determine eligibility or to obtain information specific to
your needs.
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.
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, and financial
institutions is exempt from property tax. Pollution control
equipment is eligible for exemption from property 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
and Use Tax
No sales tax is due
on purchases of electricity or natural gas used in the manufacuturing
process.
