IOWA INCENTIVES 

Iowa shows an average deal value of $4.4 million with 49 new jobs created per deal

HIGH QUALITY JOBS PROGRAM

The High Quality Jobs program provides qualifying businesses tax benefits and direct financial assistance to off-set some of the costs incurred to locate, expand, or modernize an Iowa facility.

The following tax incentives may be available:

  • A local property tax exemption of the value added to the property.
  • An investment tax credit equal to a percentage of the qualifying investment, amortized over five (5) years. This tax credit is earned when the corresponding asset is placed in service and can be carried forward for up to seven (7) additional years or until depleted, whichever occurs first.
  • A refund of state sales, service or use taxes paid to contractors or subcontractors during construction.
  • For distribution center projects, a refund of sales and use taxes paid on racks, shelving and conveyor equipment.
  • The state’s refundable research activities credit may be increased while the business is participating in the program.

Actual award amounts will be based on the business’ level of need, quality of jobs, the percentage of created/retained jobs defined as “high quality,” and the economic impact of the project.  There is a maximum tax incentive award available to a business based on qualifying jobs, wages, and investment.

To qualify for the High Quality Jobs program, a business must be a non-retail or non-service business, and:

  • Created jobs must pay at least one-hundred (100%) percent of the qualifying wage threshold at the start of the project and one-hundred and twenty (120%) percent of the qualifying wage threshold by project completion and through the project maintenance period.
  • Retained jobs must pay at least one-hundred and twenty (120%) percent of the qualifying wage threshold throughout the project completion and maintenance periods.
  • A business located in an economically distressed area must pay at least one-hundred (100%) percent wage threshold throughout the applicable contract period.
  • The business must provide a sufficient benefits package to all full time employees

NEW JOBS TAX CREDIT

The Iowa New Jobs Tax Credit is an Iowa corporate income tax credit and is available to companies who have entered into a New Jobs Training Agreement (260E) and expand their Iowa employment base by ten (10%) percent or more.

The amount of this one-time tax credit will depend upon the wages a company pays and the year in which the tax credit is first claimed.  The maximum tax credit in 2013 was $1,560 per new employee.  Unused tax credits may be carried forward for up to ten (10) years.

IOWA INDUSTRIAL NEW JOBS TRAINING

The Industrial New Jobs Training Program provides businesses, which are expanding their Iowa workforce, with new employee training. Administered by Iowa's 15 community colleges, the program is financed through bonds sold by the colleges. Depending on wages paid, the business then diverts 1.5% or 3% of the Iowa state withholding taxes generated by the new positions to the community college to retire the bonds.  Businesses participating in the Iowa Industrial New Jobs Training Program may also be eligible for reimbursement up to fifty (50%) percent of the annual gross payroll costs expended for on-the-job training, as well as a corporate tax credit if Iowa employment is increased by at least ten (10%) percent. 

Eligible businesses must:

  • Be located in, or relocating to Iowa.
  • Be engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, assembling products, warehousing, wholesaling, or conducting research and development.
  • Have customers outside of Iowa for service-providing businesses.
  • Not have closed or substantially reduced its employment base at any of its other business sites in Iowa in order to relocate substantially the same operation to another area of the state.

OTHER IOWA INCENTIVE PROGRAMS

  • Research and Development Tax Credit
  • Demonstration Fund
  • Export Trade Assistance
  • Iowa Capital Access Program (ICAP)
  • Angel Investor Tax Credit
  • Enterprise Zones
  • Innovation Fund Tax Credit
  • Targeted Jobs Withholding Tax Credit Pilot Program
  • Assistive Device Tax Credit
  • Brownfield/Grayfield Tax Credit Program
  • Endow Iowa
  • Iowa Community Based Seed Funds
  • Tax Increment Financing
  • Accelerated Career Education Program (260G)
  • Community College Business Network Training Program
  • Community College Consortium
  • Iowa Jobs Training Program (260F)
  • Iowa Student Internship Program