State & Local Taxes Waterloo/Cedar Falls, IA MSA
(800) 369-0513 (U.S.A.) or (319)
232-1156 STATE CORPORATE INCOME 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 tax rate is levied on a sliding scale as follows:
If the corporation has an Iowa net operating loss, it may be carried back 3 years and forward 15 years. Partnerships - Taxed as corporations on the federal level will also be taxed as corporations by Iowa. Other partnerships do not pay an Iowa income tax but do file a partnership return for informational purposes only. S Corporations - Owe no Iowa corporation income taxes but do file an S Corporation return for informational purposes only. Insurance Companies & Production Credit Associations - Are exempted from filing the corporate income tax returns. However, Production Credit Associations must file a franchise tax return. WORKER'S COMPENSATION RATE Worker's Compensation in Iowa ranks as one of the ten best states for low rates.
UNEMPLOYMENT COMPENSATION RATE - TAXABLE WAGE BASE Iowa has the lowest rates for new employers. The new employer's rate is 1% of the first $22,800 of each employee's wage or $228.00 in 2008 for non-construction jobs. Based on the company's experience after three years the rate could be a minimum of 0% or maximum of 8%. Approximately 45% of Iowa employers are at a zero rate. The average among existing employers who paid was 1.6 %. PROPERTY TAX Below are the current property tax rates payable in fiscal year 2008 (July 1, 2007 thru June 30, 2008). Commercial properties are taxed at 100%.Residential Rollback - 44.0803% (2007).
NO PERSONAL PROPERTY (INVENTORY) TAX Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of salable goods, raw materials and goods-in-process. 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.
* by insurance companies, financial institutions or certain commercial enterprises. INSURANCE PREMIUM TAX - (applicable to insurance companies) Iowa's Rate - 1% No premium tax on annuities SALES TAX
Note: Local/county sales tax is used improvements and new construction of public schools and roads. UTILITY (SALES) TAX
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