Corporate Income Tax

Single Factor/Iowa Sales: 6% to 12% of Net Income

Iowa's corporate income tax rates are based solely on income derived from sales within the state of Iowa. If a company in Iowa only had sales to customers outside the state of Iowa, there would be no state income tax due. For companies that do have sales in Iowa, the percentage of the company's overall income which is attributable to those Iowa sales, would be subjected to these tax rates:

Amount of Income Tax Rate
First $25,000 6%
$25,000 - $100,000 8%
$100,001- $250,000 10%
over $250,000 12%
Franchise Tax (Applies to banks only)
Individual Income Tax:
    Minimum Rate .036% (0 to $1,269 Fed. Net income)
    Maximum Rate 8.98% (Greater than $57,105 Fed. Net income)
State Gasoline Fuel Tax 20.5 cents/gallon
State Diesel Fuel Tax 22.5 cents/gallon
State Ethanol Blend Gas 10% Blend 19 cents/gallon
State Aviation Fuel Tax 8 cents/gallon
State Jet Fuel Tax 3 cents /gallon
As stated, Iowa's single-factor, non-unitary tax is based only on the percentage of total sales income within the state. Iowa allows 50 percent deductibility of federal taxes from Iowa corporate income tax, and Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit. Apportionment of the State of Iowa corporate income tax is based only on the amount of profit from sales within Iowa.

Iowa offers a $1,422 tax credit for each new employee hired if you use the Iowa New Jobs Training program. That alone could offset any Iowa taxes owed for many years.