Lee County Business Climate

Lee County Business Climate


Iowa is a Right-To-Work State:

Under Iowa law, an employee is not required to join a union or pay dues or fees to any labor union, association or organization as a condition of employment.

Iowa Corporate Income Tax

Iowa's single-factor, non-unitary tax is based only on the percentage of total sales income within the state. An Iowa manufacturer selling all its products outside Iowa would pay no Iowa corporate income tax. Iowa allows 50 percent deductibility of federal taxes from Iowa corporate income tax. Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit, New Jobs & Income Program, New Capital Investment Program or Enterprise Zone benefits available.

No Sales or Use Tax on Manufacturing Machinery and Equipment

The purchase of industrial machinery and equipment, and computers assessed as real property and used for manufacturing or used to process data by insurance companies, financial institutions, or certain commercial enterprises, is exempt from Iowa sales or use tax. In addition, there is no sales tax on materials used, including electricity or natural gas, directly in the manufacturing process. Sales and Use taxes apply to the purchase of selected personal and business products and services but certain products and services are exempt. Applies to:

Tangible personal property Yes
Services Yes
Computers Used for Processing No
Manufacturing machinery No
Pollution controls No
Materials in product No
Materials consumed Yes
Argon & similar gases consumed in manufacturing welding processes No
No Property Tax on New Industrial Machinery and Equipment

Manufacturing machinery and equipment, as well as computers used to process data by insurance companies and financial institutions, is exempt from property tax.

Workers' Compensation

Iowa's workers' compensation costs are among the nation's lowest. The average cost of workers' compensation insurance for manufacturers in Iowa is currently 25 percent lower than the national average. Iowa law provides for employer choice of doctor. New employers in Iowa pay insurance annually for each employee for the first three years. This rate can decline or increase based on the employer's experience in Iowa.

cost-per-100-payroll

Unemployment Insurance

Iowa has the lowest new employer unemployment insurance rate in the nation. IN 2005, the rate for all non-construction businesses is 1%. Iowa offers a zero rate for good experience; approximately 45% of Iowa employers are at a zero rate.

unemployment-insurance-rates

cost-for-unemployment-insurance

A new employer's rate is 1.00% of the first $18,600.00 of each employee's wages or $186.00 per employee, per year.

Wage base $18,600
Minimum rate 0%
Maximum rate 8.00%
New employer's rate 1.00%
Regulatory Assistance

The Regulatory Assistance Program enhances the range of services available to Iowa companies by advising and assisting companies in the preparation and submission of permit applications with the Iowa Department of Natural Resources (IDNR) and other Iowa regulatory agencies. The mission of the Regulatory Assistance Program is to facilitate communication between the business and regulators, and to expedite the permitting process.

Pollution Control or Recycling Property Tax Exemption:

Pollution control and recycling equipment may be eligible for a property tax exemption. Improvements to real property that are primarily used to control pollution of air or water, or primarily used for recycling, may qualify. An application must be filed for exemption.

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. Below are some basic commercial and industrial tax rate for latest year (per $1000 market value).

Taxes: Lee County Donnellson Fort Madison Franklin Houghton Keokuk Montrose St. Paul West Point
City 12.40836 16.16751 8.10000 7.19994 14.95880 8.07436 3.54112 6.92839
School 14.60815 14.52743 14.60815 14.52743 17.96705 14.60815 14.52743 14.52743
County 10.86023 9.34423 9.34423 9.34423 9.34423 9.34423 9.34423 9.34423 9.34423
Other(s) 2.16721 1.60223 1.60223 1.60223 1.60223 1.60223 1.60223 1.60223 1.60223
Total 37.96297 41.64140 33.64561 32.67383 43.87231 33.62897 29.01501 32.40228

Disclaimer: Depends on township as to total tax paid to Lee County. Ag land in Incorporated cities differs per city and is not reflected in the above table.

Source: Lee County Assessors Office, taxes levied in 2008(based on 2007 Assessments.)

Personal Property Tax

The state of Iowa does not levy a personal property tax. In Iowa, personal property includes corporate inventories of goods-in-process, raw materials and salable goods.

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:

First $25,000 6%
Next 75,000 8%
Next 150,000 10%
Over 250,000 12%
Business Licensing and Regulation

LCEDG in collaboration with local, regional, state and federal economic development partners are available to make your expansion and relocation successful. Lee County Economic Development Group, Inc. is your best one-stop contact for confidential referrals. We maintain an up to date database to help you find a regulatory or permitting resource. But if, by chance we don't know, we will find out for you in a timely manner. The following are some of the services and programs available.

  • The Lee County Health Department provides local oversight for many business and residential permitting and licensing processes. Another good first contact.
  • The Iowa Department of Natural Resources oversees air, water, land quality, and land recycling permits as well as use or reuse of under ground tanks. If a business will generate only domestic waste and discharge it to a septic system, those less than 1500 gallons per day are regulated by the county and those greater than 1500 gallons per day are regulated by the DNR. Both require a construction permit before installation. If a business will be discharging any process wastewater, even non-contact cooling water, a NPDES permit from the DNR is needed.
  • The Iowa Department of Commerce is available to answer questions about utility and insurance regulations.
  • The Iowa Department of Economic Authority┬áprovides resources and assistance to existing and new businesses. Iowa has developed a powerful series of tools and incentives to help create new opportunities for Iowans.
  • Iowa Workforce Development oversees Iowa OSHA and employment and labor regulations.
  • The Iowa Department of Revenue and Finance is the one-stop shop for Iowa tax permits and regulations.
  • The Iowa Department of Transportation┬áprovides oversight for hazardous waste and road construction permits.
  • The State of Iowa Historical Society offers archeological site assessments.