Business locating or expanding in an Enterprise Zone may receive the following tax benefits:
 

• Property tax exemptions on all or part of the costs of improvements to land and buildings for up to 10 years.
• An investment tax credit of up to 10% on corporate income taxes for investments in machinery and equipment, land, buildings, and improvements to existing buildings.
• Refund of sales, services, or use taxes paid to contractors or subcontractors during construction.
• A 13% research and development activities credit (refundable) on corporate income taxes.
• Supplemental new jobs training withholding credit of 1 1/2% of the gross wages. This credit is in addition to, and not in lieu of, the withholding credit of 1 1/2% authorized for the Iowa New Jobs Training Program.

  To receive these benefits, businesses must: 

  • Create at least 10 full-time, project-related jobs and maintain them for at least ten years.
  • Pay 80% of a standard employee medical and dental insurance plan or a monetarily equivalent benefit plan. Pay 90% of the average county or regional wage, whichever wage is lower.
  • Make capital investments of at least $500,000.
  • Not be a retail establishment.

    Currently, twenty-eight counties and eighteen cities qualify for the program by having areas which meet legislative definitions of economic distress (see map). These eligible counties or cities must apply for Enterprise Zone certification by July 1, 2003. Zone designations remain in effect for a period of 10 years from date of certification; however company benefits may extend beyond the Enterprise Zone designation period.

    Businesses locating or expanding in an Enterprise Zone may apply for benefits by completing the application provided by the IDED. Local Enterprise Zone Commissions review and approve business applications and submits them to IDED, on behalf of the business, for final approval.

    ALTERNATIVE ELIGIBLE BUSINESS

    In 1998, eligibility for Enterprise Zone Program benefits was expanded to include Alternative Eligible Businesses that might expand or locate in Iowa cities with populations of 8,000-24,000 based on 1995 census estimates. While Alternative Eligible Businesses in this category of cities may receive the same Enterprise Zone benefits as described earlier, there are a number of differences for this "new" category of alternate eligible business/cities.

    • The Alternative Eligible Business location must be within 35 miles of an existing Iowa Enterprise Zone or an adjacent state's enterprise zone.
    • Alternative Eligible Businesses must meet the higher wage requirements of the New Jobs and Income Program (NJIP) - a median wage of $11.96 per hour or 130% of average county wage, whichever is higher (check with the IDED for local NJIP wage standards).

    The Iowa communities, with populations of 8,000-24,000 based on 1995 Census estimates, in which Alternative Eligible Businesses could receive Enterprise Zone benefits are:

    Altoona, Ankeny, Boone, Carroll, Clear Lake, Clive, Coralville, Decorah, Fairfield, Fort Madison, Grinnell, Indianola, Keokuk, Knoxville, LeMars, Marion, Mount Pleasant, Muscatine, Newton, Oskaloosa, Pella, Spencer, Storm Lake and Waverly.

    Businesses interested in the Enterprise Zone program should consult the Iowa Department of Economic Development along with relevant local organizations to determine eligibility.