Iowa’s business climate offers some of the clearest tax advantages for industry compared to other states.
Iowa's corporate income tax is a single-factor, nonunitary tax and based only on the percentage of total sales income within the state (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 percent deductibility of federal taxes on corporate income tax in Iowa.
Tax Advantages
Iowa has eliminated the following tax burdens:
- 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 computer/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).