Business Climate

Businesses benefit from Iowa's progressive, business-friendly environment and tax-saving advantages.

Iowa Tax Advantages

Corporate Income Tax

A number of features of Iowa's corporate income tax offer significant advantages, including:

Single-factor, nonunitary tax—based only on the percentage of total sales income within the state.
50% deductibility of federal taxes from Iowa corporate income.
Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit or High Quality Job Program.

No Personal Property Tax

Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of goods-in-process, raw materials and salable goods.

No Sales and Use Tax on Industrial Machinery and Equipment

The purchase of industrial machinery, equipment and computers 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. In addition, there is no sales tax on materials used in the manufacturing process or for purchase of electricity or natural gas used directly in the manufacturing process.

No Property Tax on New Industrial Machinery and Equipment

Industrial machinery, equipment and computers are exempt from property tax.

For more information on Iowa's tax advantages, go to the
Iowa Department of Economic Development's (IDED) website »

Workers’ Compensation

The 2009 State Report Card for Workers’ Compensation ranks Iowa as having the m

ost effective system in the nation. The state consistently ranks among the states as having one of the lowest premium rates for Iowa employers. Iowa law provides for employer choice of doctor.

Unemployment Insurance

Iowa’s average employer unemployment insurance rate is among the lowest in the nation. Rates are dependent on the benefit experience of individual employers. Approximately 70% of private employers receive a tax rate of 1% or lower. The new non-construction rate is 1.5%. For more information, including the current taxable wage base, go to the Iowa Workforce Development Unemployment Insurance Tax Information for Employers website »

Right-To-Work

Under Iowa law, an employee must not be required to join a union or pay dues or fees to any labor union, association or organization, as a condition of employment.