Iowa Corporate Income Tax
Iowa's single-factor, nonunitary tax is based only on the percentage of total sales income within the state - an Iowa manufacturer selling all its products outside Iowa would pay no Iowa corporate income tax. Iowa allows 50 percent deductibility of federal taxes from Iowa corporate income tax, and Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit.

No Sales or Use Tax on Manufacturing Machinery and Equipment
The purchase of industrial machinery and equipment and computers assessed as real property is exempt from Iowa sales or use tax. No sales tax is due on purchases of electricity or natural gas used directly in the manufacturing process.

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, are exempt 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.

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 Iowa New Jobs Training Program and increasing its Iowa workforce by at 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 2005 is $1,224 per new position created. The credit may be taken only once; however, unused credits can be carried forward for up to 10 years.

Research and 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.