The Numbers.
Iowa's corporate income tax offer significant advantages when compared to the corporate taxes of other states, including:
◆ 50 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. Thus, if you have no sales in Iowa, you pay no Iowa corporate income tax.
◆ Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit.
The following is a general overview of what's available:
NO SALES AND USE TAX ON MACHINERY & EQUIPMENT
The purchase of industrial machinery and computers assessed as real property and used in manufacturing or the processing of data by insurance companies, financial institutions or certain commercial enterprises, is exempt from Iowa sales or use tax.
No sales tax is due on purchases of electricity or natural gas used in the manufacturing process.
NO PROPERTY TAX ON NEW INDUSTRIAL MACHINERY & EQUIPMENT
There is no property tax on new industrial machinery & equipment.
Pollution control equipment is eligible for exemption from property tax. An application must be filed for exemption.
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.