The business climate in Ames and the state of Iowa has never been more favorable. Companies operating here benefit from a business-friendly state government, technology transfer from world-renowned research institutions, a skilled and productive workforce, and a centralized geographic location.
Key Business Advantages
|Corporate Income Tax||Based only on income from sales to Iowa customers. 50% deductibility from Federal Taxes.|
|Property Tax||No tax on machinery, equipment, and computers.|
|Sales Tax||No tax on the purchase of machinery and equipment.|
|Utilities Sales Tax||No tax on utilities used during the manufacturing process.|
|Inventory Tax||No tax on inventories.|
Iowa Corporate Income Tax
A number of features of Iowa's corporate income tax offer significant advantages, including:
- 50% deductibility of federal taxes from Iowa corporate income.
- 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, High Quality Job Creation Program, or Enterprise Zone benefits.
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 Purchases
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.
Research and Development Tax Credit
A refundable credit for increasing research activities is up to 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. Companies approved for expansion in an Enterprise Zone or under the High Quality Jobs Creation program may be eligible for the amount of the tax credit to be doubled for qualifying research and development activities.
Iowa's workers' compensation costs are among the nation's lowest. The average cost of worker's compensation insurance for manufacturers in Iowa is 28 percent lower than the national average. Iowa law provides for employer choice of doctor.
Iowa has one of the lowest new employer unemployment insurance rates in the nation. In 2006, the rate for all new non-construction businesses is one percent.
Source: Iowa Department of Economic Development