City of Hawarden’s Customizable Incentive Program
To better meet the needs of today’s business the City of Hawarden provides a customizable incentive program to fit the needs of the business. These incentives may include forgivable loans, land grants, reduced interest loans, tax abatements, tax rebates and assistance with utility and infrastructure needs. These incentives are negotiated with the company bringing substantial investment and/or jobs to the City of Hawarden.
City of Hawarden’s Tax Increment Financing TIF Program
TIF is a method to incite business to locate or expand operations in an area by directing the tax revenues generated within the TIF district for investment in the district. The City of Hawarden may use the property taxes resulting from the increase in taxable valuation caused by the construction or substantial rehabilitation of commercial facilities to provide economic development incentives within the district.
City of Hawarden’s Urban Revitalization Area Plan
The Urban Revitalization Act, Chapter 404 of the Code of Iowa, is intended to encourage development, redevelopment and revitalization within a designated area of the City of Hawarden by authorizing property tax development incentives to the private sector. Qualified real estate within a designated area may be eligible to receive a total or partial exemption from property taxes on improvements for a specified number of years, with the goal of providing our community with a long-term increase or stabilization in the local tax base by encouraging new construction which might not otherwise occur.
Foreign Trade Zone
The City of Hawarden is a Foreign Trade Zone as of 2019. A foreign trade zone allows the following benefits for companies locating in our community. The benefits associated with zone use will vary depending upon the type of operation involved and authority granted by the Foreign-Trade Zones Board and Customs.
- Duty Exemption
- Duty Deferral
- Duty Reduction or Inverted Tariff
- Merchandise Processing Fee (MPF) Reduction
- Streamlined Logistics
- Quota Avoidance
State of Iowa Incentives
State of Iowa’s High Quality Jobs Program (iowaeconomicdevelopment.com/HQJ)
The High Quality Jobs Program (HQJ) is the state’s premier financial assistance program designed to support innovation and job growth. Applications for this program are filed by cities, counties or community colleges on behalf of eligible businesses.
State of Iowa’s Economic Development Set-Aside (EDSA) Program (iowaeconomicdevelopment.com/EDSA)
Projects that are located in cities with populations of less than 50,000 (which Hawarden qualifies) may be eligible for forgivable or low-interest loans from this program. The maximum incentive level from this program is $500,000 for a project, which creates or retains jobs. The business seeking assistance must meet certain wage thresholds. Applications are evaluated based upon the number of jobs created; both the public and private matching funds; the level of need by the business; and the impact of the project on the local economy and the State of Iowa.
New Jobs and Income Program (NJIP) (iowaeconomicdevelopment.com/NewJobs)
The New Jobs and Income Program provides a package of tax credits and exemptions to businesses making a capital investment of a minimum of $10.87 million and creating 50 or more jobs meeting specific wage and benefit targets. Eligibility requirements include: 1) creating 50 or more new jobs for at least 5 years, 2) pays a median wage of at least $11.96 per hour or 130% of average county wage for new jobs, whichever is higher, 3) makes a capital investment of at least $10.87 million, 4) provides and pay at least 80% of health and dental insurance, 5) business does not close or significantly reduce operations elsewhere in Iowa. Requires a business plan. No construction can be started prior to awarding of state funding.
Iowa Industrial New Jobs Training Program (iowaeconomicdevelopment.com/260E)
Iowa Jobs Training is administered through the local community college and is designed to help pay the costs of developing work specific skills in employees.
Iowa Small Business New Jobs Training Program (iowaeconomicdevelopment.com/260f)
This program is similar to the Iowa Industrial New Jobs Training Program, but is designed for smaller businesses. The funds may be used for skill assessment, orientation, pre-employment training, instructional salaries, seminar fees, and on-the-job training.
Revitalize Iowa’s Sound Economy (RISE) (iowadot.gov/systems_planning/Grant-Programs/Revitalize-Iowas-Sound-Economy-RISE-Program)
This program can be used to pay for the costs of transportation directly related to the economic development project, such as a railroad spur or a road.
Renewable Chemicals Production Tax Credit (iowaeconomicdevelopment.com/Business/RenewableChem)
Iowa offers the first in the nation Renewable Chemicals Production Tax Credit. The program incentivizes the production of 30 high-value chemicals derived from biomass feedstocks. According to the U.S. Department of Agriculture, the credit represents the “strongest” incentive package for the bio-based chemical industry.
Research Activities Credit (iowaeconomicdevelopment.com/Business/Research)
Iowa sets itself apart as being one of the few states to offer a refundable research activities credit. Iowa companies earn refundable tax credits for research and development investments that may be paid directly in cash to the company once its tax liabilities have been met. A company must meet the qualifications of the federal research credit in order to be eligible. Supplemental research credits are also available through the High-Quality Jobs (HQJ) program.
No Sales or Use Tax on Manufacturing Machinery and Equipment
The purchase of industrial machinery, equipment and computers assessed as real property are exempt from Iowa sales or use tax. No sales tax is due on purchases of electricity or natural gas used directly in the manufacturing process.
No Property Tax on New Industrial Machinery and Equipment
Manufacturing machinery and equipment, as well as computers used to process data by insurance companies and financial institutions, are exempt from property tax.
No Personal Property (Inventory) Tax
Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of salable goods, raw materials and goods in process.
State of Iowa’s Small Business Linked Investments for Tomorrow (LIFT) Program (www.iowalift.gov)
The Small Business Linked Investments Program will inject capitol into small businesses owned and operated by Iowa residents. One-half of the moneys invested will be available for qualifying small businesses which are 51 percent or more owned, operated, and actively managed by one or more women, minority persons, or persons with disabilities.
State of Iowa’s Brownfield/Grayfield Tax Credit Program (iowaeconomicdevelopment.com/Regulatory/brownfield)
Redeveloping abandoned or underutilized industrial spaces, commercial properties or public buildings. Developers in Iowa can receive tax credits for redeveloping properties know as brownfield and grayfield sites. Additional tax credits are available for projects that meet or exceed sustainable design standards as defined by state law.
Brownfield sites are abandoned, idled or underutilized industrial or commercial properties where real or perceived environmental contamination prevents productive expansion or redevelopment. Examples of Brownfield sites include former gas stations, dry cleaners, and other commercial operations that may have utilized products or materials potentially hazardous to the environment
Grayfield sites are public buildings, industrial or commercial properties that are vacant, blighted, obsolete, or otherwise underutilized. A grayfield has been developed and has infrastructure in place but the property’s current use is outdated or prevents a better or more efficient use of the property.
This tax credit program is offered as a way to promote the economic health of communities by reducing environmental potential hazards, cleaning up eyesores, creating new jobs and boosting tax revenue.
- Tax credits of up to 24% for qualifying costs of a brownfield project and 30% if the project meets green building requirements
- Tax credits of up to 12% of qualifying costs of a grayfield project and 15% if the project meets green building requirements
- Program capped at $10 million per fiscal year with a maximum award per project of $1 million
State of Iowa’s Targeted Small Business Program (iowaeconomicdevelopment.com/Entrepreneurial/TSB)
The Targeted Small Business (TSB) Program of Iowa is designed to help women, individuals with minority status, service-connected disabled veterans and individuals with disabilities overcome some of the hurtles to start or grow a small business in Iowa. The TSB program makes microloans available to qualified Iowa small business owners.
To become eligible for TSB certification or a loan, businesses must be:
- located in the state of Iowa
- operating for a profit
- make less than$4 million in gross income, computed as an average of the preceding 3 fiscal years.
- majority-owned (51 percent or more), operated and managed by a female, individual with minority status, service-disabled veteran or individual with a disability.
State of Iowa’s Reinvestment Districts Program (iowaeconomicdevelopment.com/Community/ReinvestmentDistrict)
The Iowa Reinvestment District Program is designed to assist communities in developing transformative projects that will improve the quality of life, create and enhance unique opportunities and substantially benefit the community, region and state. The program provides for up to $100 million in new state hotel/motel and sales tax revenues to be “reinvested” within approved districts. Districts cannot exceed 25 acres in size and must be in an Enterprise Zone or Urban Renewal Area. Iowa Reinvestment District plans must include tax revenues generated by “new retail establishments” and “new lessors”. New retail establishments cannot exceed 50 percent of the total proposed capital investment. At least one of the new proposed projects within the district must reach a total capital investment of $10 million. And, the total amount of new tax revenues to be remitted to the municipality cannot exceed 35 percent of the total cost of all proposed projects in the district plan.
Historic Tax Credits(iowaculture.gov/history/preservation/tax-incentives)
Tax credits and exemptions are available to encourage the reuse of historic properties, while retaining historic character-defining features. The State Tax Credit, Federal Tax Credit and County Tax Exemption programs contribute to the revitalization and preservation of historic properties across the state.
The three programs use the Secretary of the Interior’s Standards for Rehabilitation of Historic Buildings and the Guidelines for Rehabilitating Historic Buildings. Multiple program use is encouraged.
- State Tax Credit iowaeconomicdevelopment.com/Community/HistDistrict
- The State Historic Preservation Office of Iowa administers the State Historic Preservation and Cultural and Entertainment District Tax Credit Program(HPCED) in partnership with the Iowa Economic Development Authority (IEDA). The program has a multi-part application process which offers a fully refundable and transferable tax benefit for up to 25% of the qualified rehabilitation expenses for the sensitive rehabilitation of historic buildings.
- Federal Tax Credit iowaculture.gov/history/preservation/tax-incentives/federal-tax-credit
- The State Historic Preservation Office partners with the National Park Service (NPS) and the Internal Revenue Service (IRS) who administers the Federal Historic Rehabilitation Tax Credit. The amount of credit available under this program equals 20% of the qualifying expenses of your rehabilitation
State of Iowa’s Property Tax Exemption (iowaculture.gov/history/preservation/tax-incentives/property-tax-exemption)
The State Historic Preservation Office administers the County Historic Property Tax Exemption Program in partnership with County Boards of Supervisors. The program offers a local property tax incentive for the sensitive “substantial rehabilitation” of historic buildings. It includes a 4-year “freeze” on property tax increases, followed by increases of 25% per year for the following four years to adjusted value post rehabilitation.
State of Iowa’s Workforce Housing Tax Credits (iowaeconomicdevelopment.com/Community/WHTC)
Assisting construction or rehabilitation of housing in communities with workforce housing needs. This program provides tax benefits to developers to provide housing in Iowa communities, focusing especially on those projects using abandoned, empty or dilapidated properties. A Small Cities set aside for this program is available to eligible projects within the 88-least populous counties in the state.
- Total program benefits limited to $1 million per project
- The tax incentives include a refund of sales, service or use taxes paid during construction
- The tax credit is based on the new investment used for the first $150,000 of value for each home or unit
- This tax credit is earned when the home or unit is certified for occupancy and can be carried forward for up to five additional years or until depleted, whichever occurs first
- Developers may receive a state investment tax credit of up to 10% of the investment directly related to the construction or rehabilitation of the housing. Developers qualifying under the Small Cities set aside of this program may receive an investment tax credit of up to 20% of the investment directly related to the construction or rehabilitation of the housing. The state investment tax credit is fully transferable.
- Federal, state or local grants, tax credits, forgivable loans or other assistance not requiring repayment cannot be included for the purposes of calculating new investment.
- Projects must meet one of four criteria:
- Housing development located on a grayfield or brownfield site
- Repair or rehabilitation of dilapidated housing stock
- Upper story housing development
- New construction in a greenfield (only communities with demonstrated workforce housing needs or a project qualifying under the Small Cities set aside)
- The developer must build or rehabilitate at least four single-family homes or at least one multi-family building containing three or more units or at least two upper story units.
- Total project costs may not exceed $200,000 per unit for new construction or $250,000 per unit for historic rehabilitation. Total project costs for projects under the Small Cities set aside may not exceed $215,000 per unit
- The housing project must be completed within three years from the date the project is registered for benefits
ADA Federal Tax Credit (irs.gov/pub/irs-pdf/f8826.pdf)
This federal tax credit was created to help small businesses cover ADA-related eligible access expenditures. A business that for the previous tax year had either revenues of $1,000,000 or less or 30 or fewer full-time workers may take advantage of this credit. This federal tax credit can cover 50% of the eligible access expenditures in a year up to $10,250 (maximum credit of $5000). In addition, the tax deduction is available to all businesses with a maximum deduction of $15,000 per year for the other costs the credit doesn’t cover. The tax deduction can be claimed for expenses incurred in barrier removal and alterations.
Federal Work Opportunity Tax Credit (WOTC) (iowaworkforcedevelopment.gov/work-opportunity-tax-credit)
The Federal Work Opportunity Tax Credit (WOTC ) is a federal tax credit available to employers who hire eligible individuals from target groups with significant barriers to employment. Each year across the United States, employers claim more than $1 billion in tax credits under the WOTC program. WOTC reduces an employer’s cost of doing business by decreasing their federal income tax liability between $2,400.00 and $9,600.00 per employee, depending on the target group identified and hours worked during the first year of employment. For employers to earn a WOTC , the new employee must work at least 120 hours during the first year of employment and have not worked previously for the employer. Employers can claim the WOTC on an unlimited number of qualified employees each year.
The WOTC is available to employers who hire individuals from eligible target groups including:
- Temporary Assistance to Needy Families recipients
- Supplemental Nutrition Assistance Program recipients
- Individuals referred from Vocational Rehabilitation
- Supplemental Security Income (SSI) recipients
- Long-term Unemployment Recipients