State of Iowa Funding Sources

The Iowa Department of Economic Development (IDED) offers financial assistance, forgivable and low-interest loans to eligible businesses and projects. Quad Cities First staff is here to assist businesses in researching and accessing funding resources.  Many of the state’s programs are targeted to specific sectors to stimulate high quality job creation. All but two of the programs require a wage of 130% over the county wage. Grow Iowa Values Financial Assistance Program (GIVFAP): Funding source for projects focused on job creation and retention, value-added agriculture and entrepreneurial efforts High Quality Jobs Program (HQJP): Provides qualifying businesses tax credits to off-set the cost incurred to locate, expand, or modernize an Iowa facility. Wage thresholds and benefits requirements apply. Available tax incentives include:

• Local property tax exemption of up to 100% of the value added to the property for up to 20 years
• Investment tax credit equal to the percentage of the qualifying investment, amortized over five years.
• Refund of state sales, service or use taxes paid to contractors or subcontractors during construction
• For distribution center projects, a refund of sales and use taxes paid on racks, shelving and conveyor equipment

R&D Tax Credits: The State of Iowa is one of only two states in the U .S. that offers a refundable research activities credit. The federal credit equals up to 20% of qualified research expenditures and in addition, Iowa’s credit equals up to 6.5% of expenditures spent in the state. The credit may be doubled up to 13% of qualified expenditures when a business participates in the state’s High Quality Job Program (see above) or the Enterprise Zone Program. Qualified research expenditures include:

• Wages paid to an employee for performing or supporting research activity conducted at a facility in Iowa or for an employee in Iowa who directly supervises or supports research activities
• Supplies including tangible property other than land, improvements to land, and depreciable property
• 65% of expenses related to contract research

Iowa Industrial New Jobs Training: Provides businesses which are expanding their Iowa workforce with new employee training. The program is administered by Iowa’s 15 community colleges, and is financed by a portion of its Iowa state withholding taxes generated by the new positions. This structure makes the training available at essentially no cost to since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes. Participating businesses may also be eligible for up to 50% of the annual gross payroll costs expended for on-the-job training, as well as a corporate tax credit if Iowa employment is increased by at least 10% through the New Iowa Jobs Tax Credit. Targeted Small Business Financial Assistance Programs: designed to create and expand minority- or women-owned businesses through direct loans of up to $25,000 and loan guarantees of up to $40,000. The business must have annual sales of less than $4 million and be at least 51% owned, operated and managed by women, minorities or persons with a disability. The business must be certified as a “Targeted Small Business” by the Iowa Department of Inspections and Appeals before applying for or receiving TSB funds. This program is not bound to the 130% wage guidelines. Demonstration Fund: This fund provides up to $150,000 to encourage commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries. The fund is designed to encourage product refinements, market planning and market entry activities of unique products to foster competitive, profitable companies that create high paying jobs and wealth in Iowa. Companies make regular reports to the department on their progress.