Taxes, Unemployment Insurance Rates, and Worker's Compensation Costs

Iowa's numerous tax benefits ensure your business has every opportunity to achieve profitability and productivity.

Single-Factor, Nonunitary Tax

Iowa's corporate income tax is a single-factor, nonunitary tax and is based only on the percentage of total sales income within the state. For example, an Iowa manufacturer selling all its products outside Iowa pays no Iowa corporate income tax.

Federal Deductibility

Iowa is one of only five states that offer Federal Deductibility. This allows 50% deductibility of federal taxes on Iowa corporate income tax.

State Tax Advantages

Iowa offers many tax advantages, including

• No sales or use tax on industrial machinery/equipment/computers
• No sales tax on purchases of electricity or natural gas used directly in the manufacturing process
• No sales or use tax on computers/peripherals used in the processing or storage of data
• No property tax on manufacturing machinery/equipment/computers
• No tax assessment on personal property (includes corporate inventories of salable goods, raw materials, and goods in process)

Local Tax Advantages

The Greater Dubuque area also offers tax advantages, including

Unemployment Insurance Rates

Iowa has the lowest new employer unemployment insurance rate in the nation. The rate for all non-construction business is 1% for a three-year period until an experience rating is established. Iowa offers a zero rate for good experience; approximately 45% of Iowa employers are at a zero rate.

Worker's Compensation Costs

Iowa's worker's compensation costs are among the nation's lowest. The average worker's compensation insurance cost for manufacturers in Iowa is 25% lower than the national average.