Iowa: Hawkeye State

Iowa is located in the American Midwest. The region is often referred to as the “American Heartland”. It is surrounded by Minnesota to the north, Nebraska and South Dakota to the west, Missouri to the south, and Wisconsin and Illinois to the east. The majority of the total of 145,000 km² corresponds to rural character. The Hawkeye State is best known for its corn growing and vast outdoors. According to ehuacom, the major regions around the capital Des Moines, Cedar Rapids, Davenport and Sioux City are the exceptions. A total of 3.1 million people live in Iowa.

The state of Iowa offers a good business environment for companies looking to grow and increase their profitability in the United States. Business-friendly policies, nationally renowned research institutions, and a well-trained workforce are on Iowa’s credits. Economic growth is supported by other location advantages, such as low business costs, a central location and a well-developed infrastructure.

Strongly growing sectors are, for example, the manufacturing industry, financial services, but also biotechnology and renewable energies.

Iowa Location Map

A THRIVING, DIVERSE ECONOMY

Iowa has a long tradition of strong agriculture. From today’s perspective, however, this is not sufficient. The local administration recognized this some time ago and, with targeted strategies, contributed to the agricultural base being able to develop into a strong mix of industries.

As of 2018, Iowa ranks the fifth best-run state in the country (24/7 WALL STREET). This shows how intensively and successfully the local government is trying to develop the business location. Statewide, Iowa ranks a very strong second for the “lowest cost of doing business in the country” (Business Facilities, 2017). Industrial construction costs are 18 percent and industrial rental rates 15 percent below the national average.

STRONG INDUSTRIES

Manufacturing revenues account for 18 percent of Iowa’s gross domestic product, making it the state’s largest industrial sector. The main industries are the fields of industrial metal processing, precision machinery for automation equipment and environmental products. They are highly specialized and powerful.

80 insurance companies now have their headquarters in Iowa. This can be taken as proof that the insurance and financial services sector is developing strongly. The industry currently contributes more than six percent to the gross domestic product. The trend is rising. Iowa makes it an attractive location with one of the lowest insurance tax rates in the country and no insurance taxes on annuities and certain life insurance contracts. There is also a correspondingly large talent pool of workers for the industry, who can shine with both their qualifications and experience.

There have also been many positive developments in a number of bio-industries in recent years and they have been able to develop into a strong economic factor. The concentration of biological engineers in Hawkeye State is 38 percent higher than the national average (BLS, 2015). Successes were achieved both in agriculture and with regard to the research capacities of the state in plant and animal science and medicine. In research and development, international market leaders such as start-ups ensure innovations and thus lay the foundation for future economic growth.

IOWA FILLS THE SKILLS GAP

It is well known that there is a skills gap in the American labor market in some areas. That’s where Iowa comes in, and has strengthened STEM (Science, Technology, Engineering, Math) education in public schools. Cooperation between companies and students was facilitated and has since intensified. Iowa is filling the gap with a smart, educated, and efficient workforce.

Iowa offers entrepreneurs and companies good opportunities to invest in research and development. The overall framework conditions enable companies of all sizes to plan their future here and be successful.

IOWA INCOME TAX

Iowa charges an income tax of 0.33 – 8.53% depending on income. In addition, federal income taxes are payable.

IOWA CORPORATE INCOME TAX

Iowa collects a 12% corporate income tax. In addition, federal corporation tax is payable.

IOWA SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in Iowa

The sales tax in Iowa is 6% at the state level. Municipalities or districts charge an average of 0.94% sales tax. Combined, an average of 6.94% is due.

Iowa Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date :

January 1, 2019

Transactions included:

Gross proceeds from the sale of tangible personal property, specified electronically delivered products and services in the US states

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are included in the threshold

Reason:

Before July 1, 2019: revenue or transaction volume

As of July 1, 2019: Sale only

Sales/Transactions Threshold:

Before July 1, 2019: $100,000 or 200 transactions

From July 1, 2019: The transaction threshold will be lifted

Evaluation period:

The threshold applies to transactions for an immediately preceding or current calendar year

Extra information:

  • Registration Requirements: Iowa requires remote businesses to register to report sales tax “on the first day of the next calendar month beginning at least 30 days from the date the remote seller first exceeded the threshold.” collect and transfer. See Remote Sellers formore information.
  • Remote Seller Information
  • SF2417

Iowa Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

January 1, 2019

Economic Nexus Threshold:

At least $100,000 in Iowa sales or at least 200 separate transactions in the current or previous calendar year from January 1 through June 30, 2019. The transaction threshold was eliminated as of July 1, 2019. When calculating the threshold:

  • Remote sellers include sales made through a marketplace
  • Marketplace moderators include all sales made through the marketplace

Registration requirements:

  • Remote Multichannel Sellers: You must register with the Iowa Department of Revenue (DOR) and collect Iowa sales tax on sales not taxed by a Marketplace Agent once you cross the Economic Nexus Threshold.
    • While you are required to report all sales, you can apply a deduction for sales that were taxed by a marketplace intermediary.
  • Remote Marketplace Sellers: You do not need to register and collect Iowa sales tax if you have crossed the Economic Nexus threshold.
  • In-State Multichannel Sellers: You must register with the Iowa DOR and collect taxes on sales that are not taxed by a marketplace facilitator.
    • You must report all sales, but you can deduct sales that were taxed by a marketplace intermediary.
  • Marketplace Sellers in the US State : You must register. Contact the Iowa DOR for more information.