Iowa Taxes
Summary of IowaTaxes
| Tax | |
| Sales | 5% state/2% local |
| Ethanol (gallon) | $0.19 |
| Electricity | 5% State and 2% Local sales taxes for service use. 1-100% Exemption allowed for processing use on the state tax only. |
| Natural Gas | 5% State and 2% Local sales taxes for service use. 1-100% Exemption allowed for processing use on the state tax only. |
| Telecommunications | 5% State and 2% Local Sales Tax applies to Local Service and Intrastate Long |
| Distance charges; 3% Federal Sales Tax applies to local service. | |
| Property per $1,000 of market value (IA QC Average) | $33.55 |
| Unemployment Compensation (new employer rate) | 1.0% (for non-construction employers) of the first $20,400 paid each employee (2005 wage base) |
| Average Workers Compensation | Iowa's rates are the 9th lowest in the nation. |
Property Tax
Property tax rates vary by area and type of property. The tax rates below are for commercial and industrial property. They are affected by the tax levy in the several taxing districts including municipal, county and school. Iowa figures property tax on assessed value that is equal to 100% of the market value. Within the state of Iowa, machinery and equipment used in the manufacturing process is not subject to local property tax. The table below illustrates current commercial and industrial rates in three key Iowa Quad Cities communities. An industrial property (including land and building) assessed at $500,000 would pay an average of $16,775 in annual real estate taxes in the Iowa Quad Cities.Iowa Property Tax
| Basic tax rate for latest year (per $1000 market value) | Locality | ||
| Bettendorf | Davenport | Eldridge | |
| City | $12.35 | $15.24 | $6.65 |
| School | $14.69 | $17.10 | $15.12 |
| County | $5.57 | $5.57 | $5.57 |
| Other(s) | $0.93 | $0.92 | $0.93 |
| TOTAL | $33.54 | $38.83 | $28.27 |
Workers' Compensation
Workers' compensation costs in Iowa are the 9th lowest in the nation.* Quad Cities First will research the actual current rate for any of the standard job classifications in your company. For your reference, the table below shows the current rate (per $100 of payroll) for representative job classifications.Representative Workers' Compensate Rates in Iowa
| Job Classification | Job Description | Rate (per $100 of payroll) |
| 4299 | Printing, Assembly & Stapling | $3.15 |
| 8810 | Clerical | $0.32 |
| 6504 | Food Sundries manufacturing Not Otherwise Classified | $2.67 |
| 3632 | Machine Shop Not Otherwise Classified | $4.06 |
| 4484 | Plastic Manufacturing and Molding | $4.09 |
Unemployment Compensation
A new employer's rate is 1% (for non-construction employers) of the first $20,400 of each employee's wages or $204.00 per employee, per year.Wage base ..................................................$20,400
Minimum rate ...................................................0.0%
Maximum rate ..................................................8.0%
New employer's rate ............................................1%
According to the 2005 wage base, new employers in Iowa pay $204.00 annually per employee in unemployment insurance for the first five years. This rate can decline or increase based on the employer's experience in Iowa.
Corporate Income Tax
Iowa Corporate Income Tax is levied only on net income derived from sales conducted within the state--single factor formula. If the trade or business is conducted entirely within Iowa, the tax is imposed on the entire net income. If the business activity is conducted partly outside Iowa, the tax is imposed only on the portion of net income conducted within Iowa. Insurance Companies located in the State of Iowa do not pay state corporate income tax. Moreover, corporate tax is imposed only on the net income received or earned after adjustment by 50% of the federal income taxes paid. The tax rate is levied on a sliding scale as follows:Calculation of Corporate Income Tax in Iowa
| First | $25,000 | 6% |
| Next | $75,000 | 8% |
| Next | $150,000 | 10% |
| Over | $250,000 | 12% |
Personal Income Tax
The basis of Iowa taxable income is the adjusted gross income as reported on the federal income tax return.- Allows deductions for Federal Taxes paid.
- Allow itemized deductions that are similar to Federal itemized deductions. This includes deductions for: - Real estate taxes - Home mortgage interest - Contributions - Casualty or theft loss - Medical & dental expenses (expenses over 7.5% of AGI) - Job and miscellaneous other deduction
- Allows an exemption tax credit of $40 each for taxpayer and spouse and $40 for each dependent.
Calculation of Personal Income Tax Rate in Iowa
| Over | But not over | Tax $ | + | Tax Rate | Of Excess Over | |
| $0 | 1,269 | 0 | + | (0.36% | x | 0) |
| 1,269 | 2,538 | 4.57 | + | (0.72% | x | 1,269) |
| 2,538 | 5,072 | 13.71 | + | (2.43% | X | 2,538) |
| 5,072 | 11,421 | 75.38 | + | (4.50% | X | 5,072) |
| 11,421 | 19,035 | 360.91 | + | (6.12% | X | 11,421) |
| 19,035 | 25,380 | 826.89 | + | (6.48% | X | 19,035) |
| 25,380 | 38,070 | 1,238.05 | + | (6.80% | X | 25,380) |
| 38,070 | 57,105 | 2,100.97 | + | (7.92% | X | 38,070) |
| 57,105 | Over | 3,608.54 | + | (8.98% | x | 57,105) |
