Iowa's Tax Climate Ranks 40th in Country

Date: October 18, 2016 Last Edit: October 19, 2016

State fails to improve since last year.

Iowa’s Tax Climate Ranks 40th in Country.

Iowa’s tax climate ranks 40th in the country in the 2017 State Business Tax Climate Index
published recently by the Tax Foundation. That’s the same rank as last year,
showing that the state has done little to make itself more competitive.

“Iowa’s 12 percent corporate income tax rate qualifies for
the worst ranking among states that levy one,” the study points out. Iowa’s top
marginal tax rate of 8.98 percent for individual income taxes also contributed
to the state’s poor ranking, as did its imposing an alternative minimum tax
(AMT) on individuals.

“The evidence shows that states with the best tax systems
will be the most competitive at attracting new businesses and most effective at
generating economic and employment growth,” the study said. “It is true that
taxes are but one factor in business decision making. Other concerns also
matter—such as access to raw materials or infrastructure or a skilled labor
pool—but a simple, sensible tax system can positively impact business
operations with regard to these resources.”

Here’s how the study ranked Iowa in five categories:

Individual income taxes: 33rd in country

Corporate taxes: 47th

Sales taxes: 21st

Unemployment insurance taxes: 34th

Property taxes: 40th

Overall, Wyoming fared best in the study, and New Jersey
came in last.

Related Content: Small Business News | Economy | Iowa | Taxes

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