Single-factor, nonunitary tax
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).
Iowa is one of only five states that offers Federal Deductibility. This allows 50 percent deductibility of federal taxes on corporate income tax in Iowa.
Iowa is a Right-to-Work State
At 1% Iowa has the lowest unemployment insurance rate of any state in the nation. This rate is given to all non-construction employees who do not have a prior employment history in Iowa.
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)