Taxation in Iowa
Updated on Thursday 09th August 2018
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If you have decided to start a business in Iowa, it is suggested to ask for information about the taxes imposed for companies in this state. The tax regime in Iowa has been recently revised and concerns both corporations and individuals living in this state. Even if the tax legislation is about to change, one must observe the applicable tax regime for this year. For a proper understanding of the taxation structure in Iowa, we invite you to talk to one of our specialists in company formation in USA who can also help you set up a business in this state or in any American state.
Is there a privilege tax in Iowa?
No, the entrepreneurs in the state of Iowa are not subject to a privilege tax. Also, the state does not impose a franchise tax, but it is suggested to consider the other taxes enforced on businesses in Iowa.
Income tax for corporations in Iowa
The corporate income tax for Iowa corporations is set at marginal rates that range from 6% to 12%. An alternative minimum tax (AMT) can replace the income tax for companies in Iowa and the tax structure in this state is subject to several changes this year. The following table shows how the corporate income tax is imposed, depending on the taxable incomes of a company:
|Taxable Income||Tax Rate|
|Between 0$ and $25,000||6%|
|Between $25,000 and $100,000||8% minus $500|
|Between $100,000 and $250,00||10% minus $2,500|
|More than $250,000||12% minus $7,500|
What is the sales tax rate in Iowa?
The sales tax in Iowa is set at 6% and it is applicable for goods and services for sale purposes in this state. Municipalities in Iowa can impose their own sales tax, but not exceeding 1%. We remind that you can read our general guide to company incorporation in Iowa and find out information about how you can set up a business in this state.
Tax exemptions in Iowa
Labor unions, religious institutions, social clubs, charities and scientific organizations in Iowa are not subject to taxation in this state because of their non-profit status. However, the Iowa Department of Revenue solicits the filing of certain documents to prove that the institution makes no profits. A non-profit tax-exempt number is issued by the local IRS (Internal Revenue Service) to such entities in Iowa.
If you would like to know more about the taxation for companies in Iowa, we invite you to contact our team of company formation agents in USA. We can help you start a business in USA, in any state you choose for business.