Northwest Iowa's strong business climate is reflected in its relatively low unemployment, which was 3.7% (average of the four counties in the region) in December 2014 compared to 4.1% for Iowa and 5.6% nationally. Iowa is a Right-to-Work state that offers a business-friendly regulatory environment. Attractive local and state business incentives are available to companies locating in the state as well as Iowa companies that are expanding in state.
In addition, Iowa has a strong track record of enacting progressive, pro-business legislation that creates favorable conditions for both existing companies and those considering Iowa.
A proactive and responsive business tax, regulatory and legal framework position Iowa among the nation's most "business friendly" states.
Iowa Ranks Among the Nation's Top 10 for Business Friendliness. (Source: CNBC 50 State Comparison Reports)
Iowa's corporate income tax structure offers significant advantages including:
- 50% deductibility of federal taxes from Iowa corporate income. Iowa is one of only five states that offers this important deductible.
-A single-factor, non-unitary tax - Iowa's tax is based only on the percentage of total sales income within the state.
-Iowa's corporate income tax can also be reduced or eliminated by the New Jobs Tax Credit, High Quality Job Creation Program or Enterprise Zone benefits
Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of goods-in-process, raw materials and salable goods.
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. In addition, there is no sales tax on materials used in the manufacturing process or for purchases of electricity or natural gas used directly in the manufacturing process.
Manufacturing, machinery, equipment, and computers are exempt from property tax.
Iowa is one of only a few states to offer refundable research activities credit. Iowa companies earn refundable tax credits for research and development investments that may be paid directly in cash to the company once its tax liabilities have been met.
Iowa law allows cities and counties to abate local property taxes for improving industrial real estate. Several communities and counties in Northwest Iowa offer tax abatement. *
City councils or 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.*
Iowa's worker's compensation costs are among the nation's lowest. The average cost of worker's compensation insurance for manufacturers in Iowa is 1.82% That's 11% lower than the national average. (Actuarial & Technical Solutions, Inc. 2010)
Iowa has the lowest new employer unemployment insurance rates in the nation. In 2015, the rate for all new non-construction businesses is one percent (1%). Iowa Workforce Development Tax Bureau General Information 2015.
The Iowa Business and Regulatory Assistance Network is made up of business assistance coordinators for agencies across state government, working as a cohesive unit providing improved communications and service.*
Source: * Iowa Department of Economic Development,