State and Local Tax Structure
State - 6%
Local/County - 1%
STATE CORPORATE TAX
Iowa's Corporate Income Tax is based on a single factor non-unitary tax formula. Tax is levied only on the net income derived from sales conducted within the State of Iowa. For example: If a portion of the business or trade activity is conducted outside of Iowa, corporate tax is imposed only on the portion of net income conducted within Iowa. The corporate tax is imposed only on the net income received or earned after adjustment by subtracting 50% of the federal income taxes. The rate ranges from 6-12%.
UNEMPLOYMENT COMPENSATION CONTRIBUTION RATE
The new employer's rate is 1.0% (lowest permitted rate by federal law) of the first $31,600 of each employee's wage for non-construction jobs in 2020.
WORKERS COMPENSATION - Decreased final January 1, 2020
The National Council on Compensation Insurance (NCCI) made a rate filing to the Iowa Insurance Division proposing an overall 3% rate decrease for workers' compensation from the current rate that was effective January I, 2019. The new rates became final January I, 2020.
NO PROPERTY TAX ON MACHINERY & EQUIPMENT
Manufacturing machinery and equipment, as well as computers, used to process data by insurance companies and financial institutions are exempt from property tax.
SALES/USE TAX EXEMPTION STATE OF IOWA
Certain business products and services are exempt from sales and use tax.
- Manufacturing Inventory
- Pollution Controls
- Computers to Process Data - by insurance companies, financial institutions, or certain commercial
- Materials in Production
There are no property taxes on new industrial machinery and equipment in Iowa. Also, there are no property taxes on inventories.
Property tax rates on land and buildings are at levels determined by each local community.
Generally, those property taxes are levied at a rate of $25-$40 per $1,000 of the assessed value with the assessment being 90% of the market value for commercial and industrial property.
Utility Franchise Fee
City of Waterloo - Supplemental Utility Franchise Fee: 3% gas & electricity
Utility (Sales) Tax
6% Interstate - Portion used in manufacturing exempt