A highly-competitive tax policy that favors growth
The state of Iowa wants business to succeed. That’s why the state has developed a tax code that favors businesses who locate here with special advantages over other locations.
Single-Factor, Nonunitary Tax
Iowa's corporate income tax is a single-factor, nonunitary tax 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.
Iowa is one of only five states that offers federal deductibility. This allows businesses to deduct 50 percent of federal taxes from any Iowa Corporate Income Tax obligation.
State Tax Advantages
Iowa offers many tax advantages, including but not limited to:
- No sales or use tax on industrial machinery/equipment/computers used for manufacturing
- No sales tax on purchases of electricity or natural gas used 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)
- No sales tax on materials used in the manufacturing process
To view a state comparison of Iowa and our surrounding states, click here.
Local Tax Rates
For 2016-2017, the City of Dubuque property tax levy is $11.16739 per $1,000 as of January 1, 2015, taxable valuation. Additional levies include school district, area school, and county for a total levy of $34.01012.
Unemployment Insurance Rates
Iowa has one of the lowest new employer unemployment insurance rates in the nation. The 2015 standard new employer rate for all non-construction businesses for a three-year period is 1.0 percent on a $27,300 wage base.
Worker's Compensation Rates
Iowa's worker's compensation costs are among the nation's lowest. The average worker's compensation insurance cost in Iowa is 16 percent lower than the national average. Under Iowa law, the employer has the right to choose the physician and medical care for employees injured at work.