The Hawkeye State is a leading producer of corn, pork, soybeans, and other commodities. Another important industry is manufacturing, which is one of the top contributors to the state’s GDP.
Iowa produces various products, including farm machinery, motor vehicles and parts, computer equipment, and home appliances. In recent years, Iowa has become an attractive place for data centers. Google, Facebook, and Microsoft have all invested billions of dollars towards building data centers in the state.
What is the cost of doing business in Iowa?
The cost of doing business in Iowa is generally low compared to other states. Iowa has two corporate income tax rates, 5.5% and 8.4% (effective for tax years beginning on or after January 1, 2023). However, businesses may be able to reduce much of that tax through various state tax credit programs.
Iowa businesses can also take advantage of no sales tax on industrial machinery and equipment purchases, no inventory tax, R&D tax credits, and local property tax incentives.
In 2023, individual income tax rates ranged from 4.4% to 6%. Iowa has plans to move to a flat individual income tax rate of 3.9% by tax year 2026. State sales tax is 6%, and local jurisdictions can impose up to an additional 1%.
What are other reasons for doing business in Iowa?
In addition to low operating costs, businesses in Iowa also enjoy a central geographic location, access to reliable energy, and access to skilled workers. To help businesses with workforce training and development, Iowa offers several job training programs.
Iowa also performs well in quality-of-life areas such as access to healthcare and childcare.
How is the infrastructure in Iowa?
Iowa’s infrastructure supports advanced industries through an extensive road and rail system, two major river transportation systems, and a reliable energy grid.
In the latest infrastructure report card, the American Society of Civil Engineers gave Iowa a grade of C, which was higher than the nation’s overall grade of C-.
Challenges of doing business in Iowa
Iowa has been experiencing a shortage of workers across multiple sectors. In addition, some businesses may need to consider the impact of state legislation concerning LGBTQ+ and gender identity on employee recruitment and retention.