State & Local Taxes

Waterloo/Cedar Falls, IA MSA

(319) 232-1156
or info@cedarvalleyalliance.com

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: 

First $25,000 6%
Next $75,000 8%
Next $150,000 10%
Over $250,000 12%

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 

  Iowa Rate (per $100 payroll)
Average Cost for Manufacturing $3.28
Office Worker (O.C. 8810) Voluntary Rate $0.33
Source: Iowa Department of Economic Development, 2008

UNEMPLOYMENT COMPENSATION RATE - TAXABLE WAGE BASE

Iowa has the lowest new employer unemployment insurance rate in the nation. The new employer’s rate for all non-construction business is 1% of the first $23,700 of each employee’s wage or $237.00 per employee in 2009.
 
A benefit ratio system is used for individual employers who have reported to Iowa Workforce Development long enough to be qualified for a computed experience rate.  Each employer’s benefit ratio is compared to every other employer’s benefit ratio.  Those with the lowest benefit ratio receive the lowest tax rates.  Approximately 55% of Iowa’s ranked employers have a 0% rate.

 

PROPERTY TAX

Below are the property tax rates for taxes payable in fiscal year 2009 (July 1, 2008 thru June 30, 2009). Tax rates are dollars per thousand of January 1, 2007 valuations. 
Commercial & Railroad Rollback – 99.7312%
Residential Rollback – 44.0803%
Industrial Rollback – None

City

Rate per $1,000 Assessed Value

Cedar Falls

$35.30

Evansdale

$31.70

Hudson

$34.01

Waterloo

$43.32

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.

Manufacturing Machinery
Manufacturing Inventory
Pollution Controls
Computers to Process Data*
Materials in Production

* 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

State 6%
Local/County 1%

Note: Local/county sales tax is used improvements and new construction of public  schools and roads.

UTILITY (SALES) TAX

Telecommunications 0% Interstate
  7% Intrastate
Electricity/Gas 7%
  Portion used in the manufacturing process is exempt.
Internet Access Exempt
Programming Services Exempt (labor only; parts are subject to tax)

(319) 232-1156   FAX (319) 232-1829   info@cedarvalleyalliance.com

Greater Cedar Valley Alliance

10 West Fourth Street, Suite 310, Waterloo, Iowa 50701