Business Climate - Iowa Chamber Alliance

Business Climate

ICA is committed to improving Iowa’s general business climate through tax code improvements, sensible regulatory structures, impact to business cost drivers and myriad infrastructure investments to ensure a policy environment that spurs business growth. We recognize the positive changes to the tax code in 2018 and our members continue to reap the benefits as full implementation takes place. Nonetheless, Iowa has the second highest corporate income tax rates in the country. ICA recognizes the impact that this status may have on the state’s competitiveness for potential economic development projects and seeks ongoing reform. 


ICA maintains that Iowa’s property tax code remains overly complex and burden-some. Iowa’s poor ranking (40th ) for business climate in the Tax Foundation’s 2021 State Business Tax Climate Index is no longer accurate measure, as the income tax reforms of 2018 are not reflected in the study and have yet to achieve full implementation. That said, Iowa’s adjusted top corporate rate of 9.8 percent is lower than only Pennsylvania and New Jersey. This high advertised rate excludes Iowa from even competing for prospective economic investments. We will advocate for any potential sales tax increase to address this rate where a lowering to 8 percent can have a dramatic impact to the attracting of outside investment.   

Despite the improved overall ranking, the Tax Foundation ranked Iowa’s business property taxes 39th in the nation for competitiveness. This is a result of increased valuations and assessments since reforms were passed in 2013, effectively erasing any positive impact. In addition, the structural problems have been present for 40 years and are a direct result of different treatment of the four main classes of property tax-payers. The reform from 2019 provide increased transparency for property taxpayers but did not fundamentally address any differential treatment.  

Sound Budgeting

The fiscal health of state and local governments proves to be a determining factor in attracting and retaining businesses. Accordingly, a concerted effort to regularly modernize and reform budget practices must be made. This includes multi-year budgeting and strategically reviewing expenditures with a focus on major cost drivers. ICA sup-ports efforts to reduce revenue demand from local and state governments through public pension reforms and other measures that could positively impact local government budgets without tax increases. 

ICA supports providing adequate funding to meet existing budget obligations. From a legislative perspective, this may include providing tax credits and backfill to local governments, as was promised during the 2013 property tax reforms. Rescinding the backfill will result in a de facto tax increase on property, which we argue is otherwise disproportionately paid by Iowa businesses. 

Reasonable & Predictable Regulation

ICA continues to support state cooperation with businesses and stakeholder organizations to conduct periodic review and cost-benefit analysis of agency rules and regulations. Such reviews help ensure a minimally invasive and efficient regulatory environment. Rules and regulations should be evaluated for necessity, effectiveness, cost-efficiency, enforceability, and financial impact. Regulatory stability and responsive-ness must be recognized as critical components of a healthy business climate. 

Cybersecurity is an increasing concern for our members who experience attacks from both physical and digital threats. As our economy continues to move in a digital direction, we must balance the free flow of commerce and information and safeguarding our businesses and consumers from cybersecurity risks.

 The Alliance also supports policies for local communities to have the ability to make decisions at the local level including local municipalities and schools.  

Healthcare and Mental Health 

The Alliance supports accessibility to quality healthcare across the state including support of the portions of Governor Reynolds’ “Invest in Iowa” initiative that positively impacts county budgets related to mental health funding. Adequate funding to address mental health for both children and adults is an increasingly important issue to our members and their communities.  

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