Corporate Income Taxes

Corporate tax is imposed on the net income received or earned during the income year after adjustment by subtracting 50 percent of federal income taxes.

Most importantly taxable net income is determined by a single factor formula: State income tax is imposed only on the portion of net income reasonably attributable to the trade or business conducted within the state. Iowa taxes only that portion of total sales that were generated within the state.

Other Tax Considerations

Iowa does not have a franchise tax a head tax. The state sales tax is five percent, although industrial machinery, equipment and computers are exempt. Ottumwa does have a 1-cent local option sales tax. State sales tax on personal property has been eliminated.