Business Inventory Tax
Business inventory is exempt.
Corporate Income Tax
Iowa’s single-factor, non-unitary tax is based only on the percentage of total sales income within the state. An Iowa manufacturer selling all its products outside Iowa would pay no Iowa corporate income tax. Iowa allows 50 % deductibility of federal taxes from Iowa corporate income tax, and Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit.
First: $25,000 (6%)
Next: $75,000 (8%)
Next: $150,000 (10%)
First: $250,000 (12%)
Personal Income Tax
Tax Rate Range: Low – 0.36%; High – 8.98%
Income Brackets: Lowest – $1,211; Highest – $54,495
Personal Property Tax
Exempt. There is no intangible personal property tax, but the state of Iowa assesses intangible taxes on capital employed in state by foreign corporations engaged in business as loan agencies.
State Sales and Use Tax
Base Rate: 5%
Machinery Rate: none
There is an exemption for gross receipts from the sale or rental of industrial machinery, equipment and computers, including replacement parts if they will be directly and primarily used in processing tangible personal property or in research and development of new products or processing or manufacturing, refining, purifying, combining of different materials.
Unemployment Insurance
The new employers’ rate in Iowa is 1.0% for 3 years. Iowa has the lowest new employer unemployment insurance rate in the nation.
