Beyond the list of advantages the state’s business climate provides, Iowa offers an assortment of financial assistance programs to support companies in an expansion or relocation mode. ICR IOWA will work with you and evaluate programs available to your company at both local and state levels to determine the best possible package for your project.
State and Local Financial Incentive Assistance
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Incentives and Programs
High Quality Jobs Program
Provides direct financial assistance and tax credits to qualifying businesses to offset the costs incurred to locate, expand, and/or modernize. The direct financial assistance typically is in the form of a forgivable loan and a zero or low interest loan. The tax credits include an Investment tax credit against your Iowa corporate income tax liability; a refund on construction-related sales tax; and an increase in the Iowa statutory research activities tax credit, which is refundable if you don’t have an Iowa corporate income tax liability.
The wage threshold for this program has recently increased. Read full details on the Iowa Economic Development Authority’s website.
Iowa New Jobs Training
Provides businesses expanding their Iowa workforce with funding for new employee training. Available through each of Iowa’s 15 community colleges, the program is financed through bonds sold by the administering college. Depending on wages paid, the business then diverts 1.5% or 3 % of the Iowa state withholding taxes generated by the new positions to the community college to retire the bonds. Because of this structure, the training fund is made available to the company at what is essentially no cost, since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes. In addition to increasing worker productivity and company profitability through structured training activities, businesses participating in the Iowa Industrial New Jobs Training Program may also be eligible for reimbursement of costs associated with on-the-job training, as well as a corporate tax credit if Iowa employment is increased by at least 10 percent.
Contact: Stephanie Bredman, [email protected], 319-398-5580
In 2017, new employer unemployment insurance tax rate is 1% of taxable wages up to a maximum of $29,300 per person. Half of all Iowa companies have a zero rate due to good experience ratings.
Iowa’s average workers’ compensation rates will fall by about 4 percent in 2017, according to the National Council on Compensation Insurance.
Rates last year fell 4.7 percent. Iowa’s single factor is based on 100% sales apportionment only on profits from sales made within Iowa.
Utility Rebates and Efficiency Programs
- Custom rebates for all types of high energy efficient equipment and lighting.
- Free energy design assistance and financial incentives to help offset the cost of implementing energy efficient strategies.
RISE Road Funding
Funding for new or improved streets, roads, and bridges administered by the Iowa Department of Transportation (IDOT).
Funding for new or improved rail infrastructure administered by the Iowa Department of Transportation (IDOT).
New Jobs Tax Credit
- 2017 New Jobs Tax Credit $1758 per new job created
- Unused tax credits may be carried forward for up to 10 years
Iowa Urban Revitalization Property Tax Exemption
Available to qualifying businesses for value added to real estate through new construction and/or renovation. This exemption is graduated over ten years to help reduce your start-up and operating costs.
Iowa Industrial Property Tax Exemption
Available to qualifying businesses for value added to real estate through new construction and/or renovation. This exemption is graduated over five years to help reduce your start-up and operating costs.
Property Tax Exemptions/Rebates
- 427B Industrial Property Tax Abatement-15% sliding scale/per year over 5 years: 75%, 60%, 45%, 30%, 15%
- Tax Increment – Property taxes rebated to company for new real property tax investment and job creation. Typically rebated back over time.
Brownfield/Grayfield Redevelopment Tax Credits Program
Provides tax credits to projects for redeveloping brownfield or grayfield sites in Iowa. The tax credits are based upon a percentage of the qualifying expenditures made to redevelop a qualifying site. You may use the tax credits to offset Iowa corporate income tax liability or sell the credits to entities that can use them. Allocations of tax credits are typically made annually in August or September.
If you’re interested in applying for this program, the online application is open now and closes September 1. Economic Alliance members can utilize our expertise is the application process and can reach out to Brian Crowe for more information.
Tax Increment Financing
Available to qualifying businesses that build new facilities or substantially expand existing facilities. Cities or counties may refund a portion of the value added property taxes for a specified period of time.
Workforce Housing Tax Incentive Program
The Workforce Housing Tax Incentive Program is a statewide program that focuses development in existing communities. Housing businesses utilizing WHTIP will produce a net increase in affordable housing units in their community of operation. In return, the Iowa Economic Development Authority (IEDA) can provide a sales and use tax refund and an investment tax credit based on qualifying new investment.
WHTIP is further designed to encourage housing development where existing public infrastructure already exists – vacant lots, dilapidated properties, and mixed use buildings to suggest a few. Communities with a severe housing need can work with IEDA to seek designation as a Distressed Workforce Housing Community. This designation allows WHTIP assistance to be provided towards new housing development on previously undeveloped land.
Research Activities Tax Credit
- Iowa is one of few states where R&D tax credit is refundable
- Up to 6.5% qualified research and development investment
- Opportunity for supplemental +3% or +10% based on company sales while under HQJP program
- Iowa follows federal R&D requirements