As a business owner, you have a lot of taxable obligations and even smaller ones can add up pretty quickly so hopefully, you are taking advantage of all of the business tax incentives you can to help reduce those obligations. Many state and federal departments offer business tax credits and incentives but IASourceLink has compiled a list of the most common ones here in Iowa.
1. High Quality Jobs Program
In an effort to promote growth in business, the Iowa Economic Development Authority offers tax credits and direct financial assistance through multiple options (loans, forgivable loans, tax credits, exemptions and/or refunds) to help off-set portions of location, expansion, or modernization costs at an Iowa facility. There is wage threshold and other requirements in order to be eligible and retail businesses are not able to participate. Also, please note that you must apply for this program BEFORE you begin the project.
2. Redevelopment Tax Credit Program
There’s a bonus to helping revitalize existing spaces in providing multiple benefits for your community – it cleans up buildings that may not look the best, can reduce environmental hazards, and boosts tax revenue, not to mention the tax credit you can get as part of the Redevelopment Tax Credit Program. This is applicable to the redevelopment of Brownfield sites (abandoned, idled or underutilized commercial properties where real or perceived environmental contamination exists), and Grayfield sites (abandoned public buildings or commercial properties that are vacant, blighted, obsolete or underutilized).
3. Research Activities Tax Credit
According to the Iowa Economic Development Authority, Iowa is one of the few states that offers a research activities credit, in particular, a refundable credit. The primary qualification here is that your company must meet the federal research criteria to be eligible.
Through this credit, you could pay wages paid to an employee for performing or supporting a research activity conducted at an Iowa facility or for an employee in Iowa who directly supervises or directly supports research activities; supplies including tangible property other than land, improvements to land and depreciable property; or 6.5% of expenses related to contract research.
4. Pollution Control or Recycling Property Tax Exemption
If you’re making improvements to the property to control air or water pollution, or for recycling, you may be eligible for this exemption. In order to qualify, your business must be certified as eligible by the Iowa Department of Natural Resources with three general qualifications.
1. Installation or construction must have been completed after September 23, 1970, for pollution control property and for recycling property beginning January 1, 1994.
2. Construction or installation must have been completed by December 31 of the year preceding the year for which exemption is claimed.
3. The property must be certified by the Department of Natural Resources.
This is by no means a definitive list of credits or their qualification criteria. You can get links to all of the incentives mentioned above as well as a link to the complete list by heading over to Iowa Business Tax Incentives.