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Iowa Business Advantages | Iowa Economic Development

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Published by the Iowa Economic Development Authority, this brochure analyzes the business advantages of expanding or relocating your business in Iowa. If you're thinking about a business expansion or relocation and the Midwest states are part of your search area, then this is the information you'll want to get your site location search started.

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Iowa Business Advantages | Iowa Economic Development

  1. 1. Iowa’s business climate has never been more favorable. Iowa has the lowest cost of doing business in the nation, is perfectly positioned with its central location and has a diversified and robust economy. Companies operating in Iowa benefit from a business-friendly state government, business-minded tax incentives and a skilled and productive workforce within a right-to-work state. Read more about the many business advantages companies enjoy in Iowa. Companies doing business in Iowa enjoy one of the nation’s most business-friendly economic climates. The proof is in the numbers. • Iowa consistently has the lowest cost of doing business in the United States. (America’s Top States for Business, CNBC, 2011) • Iowa’s average industrial electricity cost per kWh is 21 percent below the U.S. average. (U.S. Energy Information Administration, 2011) • Iowa’s average lease rates for industrial space are 13 percent below the U.S. average. (NAI Global, 2011) • Iowa’s construction costs for industrial space are 14 percent below the U.S. average. (RSMeans, 2010) • Iowa’s workers’ compensation costs are among the nation’s lowest. The average cost of workers’ compensation insurance for manufacturers in Iowa is 16 percent lower than the national average. Iowa law provides for employer choice of doctor. (Actuarial and Technical Solutions, 2009) • Iowa’s nine largest communities ranked as Best Places for Business. (Forbes Magazine, 2011)
  2. 2. Iowa’s central geographic location and abundance of transportation options make the state a quick and easy place for businesses to distribute product. • Three interstate highways — I-35, I-80 and I-29 — pass through Iowa offering coast-to-coast, border-to-border access in the U.S. transportation grid. The state‘s network of highways, intercontinental and short-line railroad and barge routes combine to provide efficient and cost-effective transportation choices. • Iowa has nearly 4,000 miles of rail freight track operated by 19 railroad companies — four are major, national carriers. (Iowa Department of Transportation, 2008) • More than 175 million pounds of cargo are transported through Iowa’s airports. (Iowa Department of Transportation, 2011) • There are 60 barge terminals that ship and receive tonnage in Iowa — 55 on the Mississippi River and five on the Missouri River. (Iowa Department of Transportation, 2010)
  3. 3. Iowa has a diversified economic environment. Key industries in the state include: advanced manufacturing; renewable energy and biorenewable chemicals; food processing; and insurance and financial services. advanced manufacturing • Iowa ranks second in the Midwest in terms of value-added per manufacturing worker. (U.S. Census Bureau, 2010) • Iowa is ranked sixth nationally in terms of the importance of manufacturing to the state’s economy. (Bureau of Economic Analysis, 2011) • Approximately 4,100 manufacturers employ about 201,000 Iowans and generate more than $9.9 billion in payroll. • Iowa exported $13.3 billion worth of manufactured and value-added goods. (Global Trade Information Service, 2011) • Iowa’s manufactured exports have grown by more than 37 percent over the last five years. (Global Trade Information Service, 2011) renewable energy and biorenewable chemicals • Iowa is one of only a few states in the nation to manufacture all of the main components of a wind turbine — turbines, blades and towers. • Iowa ranks second in the nation in wind generation output. (AWEA, 2012) • Home to major manufacturers and 80 industry suppliers, Iowa is the leader for workers employed in manufacturing for the wind industry and second for construction and operations and management. (Environmental Law & Policy Center, 2010 and U.S. Wind Industry Annual Market Report - AWEA, 2010) • Iowa leads the nation in ethanol production – 40 ethanol refineries have a combined annual capacity of almost 3.7 billion gallons. (Renewable Fuels Association, 2012) • With 11 biodiesel plants in operation, Iowa’s biodiesel production increased from 50,000 gallons in 1999 to 304 million gallons in 2012. (Iowa Renewable Fuels Association, 2012) • Iowa is leading the way in developing and expanding the market for value-added biomass-based fuels and chemicals with a concentration of raw materials and abundant agricultural resources. According to the USDA, fuels created from biomass will increase to 10 percent by 2020 and to 20 percent by 2030.
  4. 4. food processing • Iowa is home to 27 of the largest 100 food manufacturers/processors. (Food Processing Magazine, 2010) • Iowa is home to the world’s largest cereal mill insurance and financial services • Iowa’s insurance industry output as a percent of gross domestic product ranks third among the (Quaker Oats) and caramel color plant 50 states. (Sethness) and is home to North America’s (U.S. Bureau of Economic Analysis, 2009) largest spice plant (Tone’s). • The food industry is a major component of • In recent years, Iowa has lowered its insurance premium tax by half to just one percent — one Iowa’s overall economy contributing over six billion to the state’s Gross Domestic Product of the lowest rates in the nation. • Iowa has seen a solid financial services industry (GDP), representing approximately 24 percent of expansion. There are 39,600 insurance industry Iowa’s manufacturing GDP and employing more professionals currently employed in Iowa. than 51,000 Iowans. (U.S. Bureau of Economic Analysis, 2010 (Iowa Workforce Development, 2012) and Iowa Workforce Development, 2012) • Iowa creates a natural home to global food processing and ingredient companies as the number one producer in corn, soybeans, eggs and pork. “Diamond V ® has earned a global reputation of trust and reliability within the animal feed industry. One of the newest additions to the industrial corridor of Cedar Rapids, Iowa, is our $25 million state-of-the-art manufacturing facility which will enhance our ability to better service customers and keep pace with the growing demand both in the U.S. and around the world. Why Iowa? We’ve been able to capitalize on Iowa’s superior business climate, central geographic location and excellent transportation infrastructure. Since 1943, we’re proud to call Iowa home.” John Bloomhall President & CEO, Diamond V ®
  5. 5. corporate income tax Iowa’s corporate income tax policies offer significant advantages for business: • Single-factor, non-unitary tax — Iowa’s tax is based only on the percentage of total sales income within the state. • 50 percent deductibility of federal taxes from Iowa corporate income. • Iowa corporate income tax may be reduced or eliminated by state tax credit programs. property and sales or use taxes • No personal property tax for corporate inventories of goods-in-process, raw materials or salable goods. • No property tax on industrial machinery, equipment or computers. • No sales or use tax on purchases of industrial machinery, equipment and computers used for manufacturing or to process data by insurance companies, financial institutions or certain commercial enterprises. • No sales tax on materials used in the manufacturing process or purchases of electricity or natural gas used directly in the manufacturing process. refundable research and development tax credit Iowa is one of only a few states in the nation to consistently offer a refundable research activities credit—even while federal research credits have fluctuated with intermittent expiration dates and reinstatement periods. Iowa’s refundable credit for increasing research activities is up to 6.5 percent of the company’s qualifying research expenditures in Iowa. Companies approved for expansion in an Enterprise Zone or under the High Quality Jobs program may be eligible for a supplemental tax credit for qualifying research and development activities. workforce The success of a company depends heavily on the strength of its workforce. Iowa has all of the key elements to provide a smart, productive workforce necessary to foster business growth. The combination of Midwest work ethic and a leading education system results in one of the most productive workforces anywhere. • • • • Iowans consistently rank number one in the United States for SAT college entrance exam scores. Iowa is a right-to-work state. Iowans tend to stay in one job an average 12+ years. (Iowa Workforce Development, 2010) Iowa has the 9th highest number of bachelor’s degrees in natural science and engineering conferred per 1,000 individuals 18-24 years old. (National Science Foundation, Science and Engineering Indicators, 2012) • Iowa has the seventh highest percentage of population that are high school graduates or higher. (U.S. Census, 2010)
  6. 6. The Iowa Economic Development Authority (IEDA) works with businesses and communities to bolster Iowa’s economy and position the state for growth. IEDA can assist your company by providing the following types of assistance: • Direct financial assistance, tax credits and job training funds. • Confidential location reviews and site location assistance to businesses considering Iowa. • Technical assistance for Iowa businesses considering expansion, new companies to Iowa and foreign direct investment. • Free searchable database of information on existing buildings, available sites and Iowa communities. • Regulatory process assistance provided to Iowa companies. • Training and support available to all companies expanding in Iowa. Iowa works in partnership with public/private service providers and other state agencies to actively promote new employee training, incumbent worker preparation, lifelong learning and development and expansion of the state’s labor pool. contact us Please visit iowaeconomicdevelopment.com for more information on how Iowa can assist you, to learn more about Iowa’s business climate, assistance and expansion programs, available buildings, sites and more. Contact us anytime at 1.800.245.4692 or +1.515.725.3100 (international). All inquiries are handled confidentially. follow us
  7. 7. IOWA ECONOMIC DEVELOPMENT AUTHORITY 200 East Grand Avenue Des Moines, IA 50309 USA International: +1.515.725.3100 Domestic: 1.800.245.4692 iowaeconomicdevelopment.com JG 06132012

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