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Local Tax Abatement:
Iowa law allows cities and counties to abate local property taxes for value added in industrial real estate.  The maximum amount of actual value added at a new or expanded facility that is eligible to be exempt from taxation is:

Year One Year Two Year Three Year Four Year Five
75% 60% 45% 30% 15%

Tax Increment Financing
For property in the Red Oak TIF district the City Council may use the property taxes resulting from the increase in taxable valuation due to construction of new industrial or commercial facilities to provide economic development incentives to a business or industry.

New Jobs Tax Credit:
Businesses entering into an agreement under the state's training program, and which increase their workforce by at least 10 percent, may qualify for this credit to its Iowa corporate income tax.

No Sales or Use Tax on Manufacturing Machinery and Equipment Purchases:
The purchase of industrial machinery and computers assessed as real property and used for manufacturing or used to process data by insurance companies, financial institutions or certain commercial enterprises, is exempt from Iowa sales or use tax.

No Personal Property (Inventory) Tax:
Personal property is not assessed for tax purposes.  This includes corporate inventories of salable goods, raw materials and goods-in-process.

No Sales and Use Tax:
No sales tax is due on purchases of electricity or natural gas used in the manufacturing process.

Iowa Corporate Income Tax:
Iowa's single factor, non-unitary tax is based only on the percentage of total sales incomes within the state.  An Iowa manufacturer selling their entire product outside Iowa would pay no Iowa Corporation Income Tax.  Iowa allows 50% deductibility of federal taxes from Iowa Corporation Income Tax and Iowa Corporation Income may be reduced or eliminated by the New Jobs Tax Credit.

Iowa Is a Right-To-Work State

Worker's Compensation:
Iowa's worker's compensation costs are the ninth lowest in the nation.

Unemployment Insurance:
Iowa has one of the lowest new employer unemployment insurance rates in the nation.

Employee Training Programs:
Programs can provide training/retraining services for new and/or existing employees.

Regulatory Assistance:
The Regulatory Assistance Program enhances the range of services available to Iowa companies by advising and assisting companies in the preparation and submission of
permit application with the DNR and other Iowa regulatory agencies.

Enterprise Zone Program:
Manufacturers and other businesses locating new facilities or expanding existing and creating new jobs in economically distressed areas of Iowa now have an additional incentive to do so.  In order to promote development in economically distressed areas of the state, Iowa established the Enterprise Zone Program.  Businesses locating or expending in an established Enterprise Zone may be eligible to receive certain local and tax benefits. Enterprise Zones can be established in Montgomery County Iowa.  For more details contact the Executive Director at (712) 623-2261.

Red Oak Chamber and Industry Association:
The Association
realizes the cost of a start-up operation, expansion, or relocation by a company can be substantial.  That is why the Contact Committee works to assist local companies as well as new start-ups in putting together financial packages that allow the company to grow and expand and still assure the company viability and profitability for tomorrow.  Contact us to discuss a financial package that can be suited to your business needs or visit our website at

Shawnna Silvius, Executive Director
307 E. Reed Street, Red Oak, IA  51566
(402)217-1929    E-mail:


The following Websites provide news and resources of interest:

Iowa Department of Economic Development
SBA On-Line
State of Iowa
Small Business Development Centers


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Montgomery County Development Corporation
307 E. Reed St, Red Oak, IA  51566