Iowa is a state rich with human capital, but held back by a complicated and out-of-date tax system. Today we're pleased to release Iowa Tax Reform Options: Building a Tax System for the 21st Century, the fifth in...
The facts on Iowa’s Tax Climate
8.98%individual income taxTop rate
12%corporate income taxTop rate
$1,515property taxcollections per capita
Iowa's Individual Income Tax System
Iowa's individual income tax system consists of nine brackets with a top rate of 8.98%. The top rate ranks 4th highest among states levying an individual income tax. Iowa's state and local tax collections per person were $1,145 in 2013, which ranked 17th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Iowa's Corporate Income Tax System
Iowa's corporate income tax system consists of four brackets with a top rate of 12%. The top rate ranks 1st highest among states levying a corporate income tax. Iowa's state and local corporate income tax collections per person were $139 in 2013 which ranked 21st highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita
50-State Table of State Corporate Income Tax Collections Per Capita
Iowa Sales and Excise Taxes
Iowa levies a 6% general sales or use tax on consumers, which is above the national median of 5.95%. The average local sales tax rate is an additional 0.8%. Iowa's state and local governments collect $913 per person in general sales taxes and $430 per person in excise taxes, for a combined figure of $1,343, which ranks 34th highest nationally. Iowa's gasoline tax stands at 32 cents per gallon, 14th highest nationally, while its cigarette tax stands at $1.36, 27th highest nationally.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Iowa Property Tax Collections Relatively High
Iowa's state and local governments collected approximately $1,515 per person in property taxes in 2013, which ranks 16th nationally.
State and local property tax collections per capita by state
Tax Freedom Day Arrives on April 14th in Iowa
Tax Freedom Day is the day when Americans have finally earned enough money to pay off their total tax bill for the year. In 2016, Iowa taxpayers have to work until April 14th (14th earliest nationally) to pay their total tax bill.
Iowa's State and Local Tax Burden Ranks 31st
Iowa's 2012 tax burden of 9.2% ranks 31st highest in the nation, and is below the national average of 9.9%. Iowa's taxpayers pay $4,037 per capita in state and local taxes.
Iowa's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Iowa's 2016 Business Tax Climate Index Ranks 40th
Iowa ranks 40th on the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes (49th), individual income taxes (32nd), sales taxes (24th), unemployment insurance taxes (34th), and taxes on property (40th), including residential and commercial property.
State Business Tax Climate Index (full study)
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