TAXES
IOWA QUAD CITIES
One of the many advantages of a Quad City location is that it provides you and your
company with a choice of state and community options.
The summary table below and the tax discussions that follow provide current data on
the principal taxes in the Iowa Quad Cities.
Tax Type
Sales
Gasoline (gallon)
Diesel (gallon)
Ethanol(gallon)
City add-on tax
Electricity
Natural Gas
Telecommunications
5% state/2% local
$.207
$.225
$.19
5% State and 2% Local sales taxes for
service use. 1-100% Exemption allowed
for processing use on the state tax only.*
5% State and 2% Local sales taxes for
service use. 1-100% Exemption allowed
for processing use on the state tax only.*
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.
*Based
on an energy study submitted to the local utility and agreed to by the
Department of Revenue. Source: MidAmerican Energy
TAXES
IOWA QUAD CITIES
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.
EXAMPLE:
Market value =
$500,000
÷ $1,000
500
* 33.55 (IA QC Average
Rate/$1000)
$ 16,775 Estimated tax
PROPERTY TAX
Basic tax rate for latest year (per $1000 market value)
Bettendorf
Davenport Eldridge
Locality
$12.35
$15.24
$6.65
City
$14.69
$15.12
School
$17.10
$5.57
$5.57
$5.57
County
$0.93
$0.93
Other(s)
$0.92
$33.54
$38.83
$28.27
TOTAL
PERSONAL PROPERTY TAX
The state of Iowa does not levy a personal property tax.
TAXES
IOWA QUAD CITIES
SALES AND USE TAX
Sales and Use Tax applies to the purchase of selected personal and business products and
services but certain products and services are exempt.
The chart below shows some examples of sales or rentals that are exempt from tax:
In processing.
To maintain a manufactured product's integrity
or to maintain any unique environmental
conditions required for the product.
Machinery, equipment and
computers directly and
primarily used by a
manufacturer:
To maintain unique environmental conditions
required for other machinery, equipment and
computers used in processing.
Including test equipment used in processing to
control the quality and specifications of the
product.
In research and development of new products
or processes of processing.
In recycling or reprocessing of waste products.
Pollution control
equipment used by a
manufacturer:
Core and mold-making
equipment and sand
handling equipment:
Even when the equipment is not directly and
primarily used in any kind of processing.
Directly and primarily used in the mold-making
process by a foundry.
In addition, materials used to construct or self-construct any machinery, equipment
or computer in the table above is exempt.
Sales of fuel and electricity consumed by machinery, equipment, or computers in the
above paragraph are also exempt.
Note: Raw materials used to manufacture products are tax exempt. Taxes are figured
into the finished product to be sold. Products sold within the state in which said
product was manufactured is subject to that state's sales tax. Products sold out of
state are tax exempt.
For more details on Sales and Use tax exemptions please go to the State of Iowa's web
page at http://www.state.ia.us/tax/educate/78530.html or contact the Quad City
Development Group.
TAXES
IOWA QUAD CITIES
WORKERS’ COMPENSATION
Workers' compensation costs in Iowa are the 9th lowest in the nation.* The Quad
City Development Group will be pleased to 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.
OC 4299
OC 8810
OC 6504
OC 3632
OC 4484
Printing, Assembly & stapling
Clerical
Food Sundries manufacturing
N.O.C.
Machine Shop N.O.C.
Plastics manufacturing - molding
3.15
.32
2.67
4.06
4.09
* Source: Mid-American Energy Business Climate Comparison
http://www.midamerican.com/common/econdev/html/econdev_busclimate_ia.html
UNEMPLOYMENT COMPENSATION
The State of Iowa has the country's lowest Unemployment Compensation rate for
new employers.
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.
TAXES
IOWA QUAD CITIES
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
Next
Next
Over
$ 25,000
75,000
150,000
250,000
6%
8%
10%
12%
TAXES
IOWA QUAD CITIES
PERSONAL INCOME TAX
The basis of Iowa taxable income is the adjusted gross income as reported on the
federal income tax return.
1. Allows deductions for Federal Taxes paid.
2. Allow itemized deductions that are similar to Federal itemized deductions.
This includes deductions for:
a. Real estate taxes
b. Home mortgage interest
c. Contributions
d. Casualty or theft loss
e. Medical & dental expenses (expenses over 7.5% of AGI)
f. Job and miscellaneous other deductions
3. Allows an exemption tax credit of $40 each for taxpayer and spouse and
$40 for each dependent.
4. Taxable income is taxed at the following rate for 2005:
Over
$0
1,269
2,538
5,072
11,421
19,035
25,380
38,070
57,105
But not
over
Tax
$
1,269
0.00
2,538
4.57
5,072
13.71
11,421
75.38
19,035
360.91
25,380
826.89
38,070 1,238.05
57,105 2,100.97
over 3,608.54
Tax
Rate
+
+
+
+
+
+
+
+
+
(0.36%
(0.72%
(2.43%
(4.50%
(6.12%
(6.48%
(6.80%
(7.92%
(8.98%
x
x
x
x
x
x
x
x
x
Of
Excess
Over
0)
1,269)
2,538)
5,072)
11,421)
19,035)
25,380)
38,070)
57,105)
* IMPORTANT NOTE: According to the State Executive and Legislative branches
of the Iowa State Government, the effective top rate is 5.75% to 6.25% for
personal income tax rates once items 1 - 4 are factored in.