LOCAL TAX INCENTIVES
City of Fort Madison Tax Abatement
Iowa law allows cities and counties to abate local property taxes for value-added to industrial real estate. The maximum amount of actual value-added at a new or expanded facility, which is eligible to be exempt from taxation, is:
Year One: 75% Year Four: 30%
Year Two: 60% Year Five: 15%
Year Three: 45%
The City of Fort Madison offers tax abatement if an owner adds at least 25% of the property’s assessed value, worth of construction. The property taxes are then abated for three (3) years.
Contact
Lee County Assessor’s Office
933 Avenue H
Fort Madison, IA 52627
319-372-6302
County/State Temporary Historic Property Tax Exemption
Local property tax incentive for the sensitive, “substantial rehabilitation” of historic buildings. Property taxes remain the same (a freeze) for four years followed by increases of 25% per year for the following four years. Two applications are required – one from SHPO and one from the county assessor.
Eligibility Requirements: Properties must be listed on or eligible for listing on the National Register, contributing to National Register or local historic districts, or designated by a county or municipal landmark ordinance. The property must also be eligible based on the specific county’s priority list for that tax year. The County Board of Supervisors will establish priorities for which an exemption may be granted and will annually designate real property in the county for a historic property tax exemption. A public meeting must be held, with notice given, at which the proposed priority list will be presented.
Contact
Lee County Assessor’s Office
933 Avenue H
Fort Madison, IA 52627
319-372-6302
STATE TAX INCENTIVES
State Historic Property Tax Credit
Description: 25% of qualified rehabilitation costs are available as a credit against the owner(s) state income taxes. Properties do not need to be income-producing. The SHPO cannot reserve credits for more than three years into the future. For a residential property or barn constructed before 1937, the cost of a qualified rehabilitation project must exceed either $25,000 or 25% of the assessed value (less the land value) – whichever is less. For commercial properties, the rehabilitation project must exceed 50% of the assessed value of the property (less the land value) before rehabilitation. If there is no assessed value the insured value can be used. Rehabilitation work must meet the Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Applications and photos (a 3 part process) must be reviewed and approved by the State Historic Preservation Office (SHPO).
Eligibility Requirements: Properties must be listed on or eligible for listing on the National Register of Historic Places or barns constructed before 1937 or barns that are eligible or listed on the National Register of Historic Places.
For copies of the applications and guidelines, please contact:
Fort Madison Main Street
614 9th Street
Fort Madison, IA 52627
319-372-5471
www.fortmadison.com
Iowa Finance Authority Housing Tax Credit
Available at either 9% or 4%, the Housing Tax Credit is a great tool that has been used quite successfully in Iowa. Typically, it used for creating apartments or condominiums from upper-story or large rehabilitation projects.
Program Eligibility
An eligible Housing Tax Credit project must be a residential rental property. The property may be apartments, single-family houses, duplexes, town homes or condominiums.
If a project is eligible, the owner will receive a tax credit for 10 years, with one of the following options:
- 20% or more of the units in the project are occupied by individuals or families whose income is 50% or less than the area median gross income and the unit is rent restricted.
- 40% percent or more of the units in the project are occupied by individuals or families whose income is 60% or less than the area median gross income and the unit is rent restricted.
The credit is available to individuals, corporations and partnerships for new construction, substantial rehabilitation or acquisition and rehabilitation of Housing Tax Credit projects.
Contact:
Iowa Finance Authority
800-432-7230
FEDERAL TAX INCENTIVES
Federal Historic Property Tax Credit
Description: 20% of qualified rehabilitation costs are available as a credit against federal income taxes on income-producing historic properties. Rehabilitation work on historic properties must be “substantial” (an IRS test) and meet the Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Applications and photos (a 3 part process) must be reviewed by the State Historic Preservation Office (SHPO) and be approved by the National Park Service.
Eligibility Requirements: Properties must be listed on the National Register or be evaluated as National Register eligible and then listed within 30 months after claiming the credit on IRS tax forms. (A 10% tax credit is also available for non-historic, non-residential, income producing properties built before 1936. These properties can neither be listed on the National Register nor be a contributing resource in a National Register-listed historic district.)
For copies of the applications and guidelines, please contact:
Fort Madison Main Street
614 9th Street
Fort Madison, IA 52627
319-372-5471
www.fortmadison.com
Federal Architectural & Transportation Barrier Removal Tax Deduction
Frequently Asked Questions
What is it? Businesses may take an annual deduction for expenses incurred to remove physical, structural, and transportation barriers for persons with disabilities at the workplace. The cost of an improvement to a business asset is normally a capital expense. However, you can choose to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who disabled or elderly. Business may take an annual deduction for expenses incurred to remove physical, structural, and transportation barriers. All taxpaying businesses are eligible. Deduction up to $15,000 per year for qualified architectural and transportation barrier removal expenses.
Who is eligible? All businesses are eligible.
What is the amount? Businesses may take a tax deduction of up to $15,000 a year for expenses incurred to remove barriers for persons with disabilities. Amounts in excess of the $15,000 maximum annual deduction may be depreciated.
What expenses are covered? The deduction is available every year. It can be used for a variety of costs to make a facility or public transportation vehicle, owned or leased for use in the business, more accessible to and usable by persons with disabilities. Examples include the cost of:
- providing accessible parking spaces, ramps, and curb cuts;
- providing telephones, water fountains, and restrooms which are accessible to persons using wheelchairs;
- making walkways at least 48 inches wide.
What expenses are not covered? The deduction may not be used for expenses incurred for new construction, or for a complete renovation of a facility or public transportation vehicle, or for the normal replacement of depreciable property.
May I use the tax credit and tax deduction together? Small businesses may use the credit and deduction together, if the expenses incurred qualify under both Sections 44 and 190. For example, if a business spent $12,000 for access adaptations, it would qualify for a $5,000 tax credit and a $7,000 tax deduction.
Are there limits on annual usage? Although both the tax credit and deduction may be used annually, if a business spends more than may be claimed in one year, it cannot carry over those expenses and claim a tax benefit in the next year.
How can this credit be deducted? The amount spent is subtracted from the total income of a business to establish its taxable income. In order for expenses to be deductible, accessibility standards established under the Section 190 regulations must be met.
Contact
Office of Chief Counsel, IRS
1111 Constitution Avenue, NW
Washington, DC 20224
(202) 622-3110
Small Business Disabled Access Tax Credit
Frequently Asked Questions
What is it? Small businesses may take an annual tax credit for making their businesses accessible to persons with disabilities. The disabled access credit is a nonrefundable annual tax credit for an eligible small business that pays or incurs expenses to provide access to persons with disabilities.
Who is eligible? Small businesses that in the previous year earned a maximum of $1 million in revenue or had 30 or fewer full-time employees are eligible.
What is the amount? The credit is 50% of expenditures over $250, not to exceed $10,250, for a maximum benefit of $5,000. The credit amount is subtracted from the total tax liability after calculating taxes.
What expenses are covered? The credit is available every year and can be used for a variety of costs such as:
- sign language interpreters for employees or customers who are hard of hearing;
- readers for employees or customers who have visual impairments;
- the purchase of adaptive equipment or the modification of equipment;
- the production of print materials in alternate formats (e.g., Braille, audio tape, large print);
- the removal of architectural barriers in buildings or vehicles.
What expenses are not covered? The tax credit does not apply to the costs of new construction, and a building being modified must have been placed in service before November 5, 1990.
May I use the tax credit and tax deduction together? Small businesses may use the credit and deduction together, if the expenses incurred qualify under both Sections 44 and 190. For example, if a business spent $12,000 for access adaptations, it would qualify for a $5,000 tax credit and a $7,000 tax deduction.
Are there limits on annual usage? Although both the tax credit and deduction may be used annually, if a business spends more than may be claimed in one year, it cannot carry over those expenses and claim a tax benefit in the next year.
How can this credit be deducted? Businesses can claim this credit on IRS Form 8826.
Contact
Office of Chief Counsel, IRS
1111 Constitution Avenue, NW
Washington, DC 20224
(202)622-3110
http://www.iowaworkforce.org/access/smallbustaxcredit.html
Work Opportunity Tax Credit
Frequently Asked Questions
What is it? The Work Opportunity Tax Credit (WOTC), which replaces the Targeted Jobs Tax Credit (TJTC) program, provides a tax credit for employers who hire certain targeted groups. The Work Opportunity Tax Credit (WOTC), provides a tax credit for employers hiring individuals from certain targeted groups (see detailed information). An employer may take a tax credit of up to 40% of the first $6,000 in the first year wages per qualifying employee. The maximum per employee is $2,400 per tax year.
Who is in the targeted groups? Low-income, vocational rehabilitation referrals, former AFDC recipients, veterans, ex-felons, food stamp recipients, and SSI recipients.
How does it apply to persons with disabilities? Employers that hire individuals who are SSI recipients or certified vocational rehabilitation (VR), State agency, Employment Network, or U.S. Department of Veterans Affairs referrals and meet all of the criteria described below may claim the WOTC. Employers that hire individuals who received Social Security Disability Insurance and have a Ticket to Work assigned to an Employment Network may also claim the WOTC.
- having a physical or mental disability resulting in a barrier to employment, and
- referred to an employer upon completion of or while receiving rehabilitative services, pursuant to the Vocational Rehabilitation Act of 1973, as amended.
- signed employment plan with a state agency, Employment Network, U.S. Department of Veterans Affairs.
Who is eligible? All businesses are eligible.
What is the amount? An employer may take a tax credit of up to 40% of the first $6,000, or up to $2,400, in wages paid during the first 12 months for each new hire.
What are the Minimum Employment Requirements? Eligible employees must work 180 days or 400 hours; summer youth must work 20 days or 120 hours. A partial credit of 25% for certified employees who worked at least 120, but less than 400 hours may be claimed by the employer.
Contact
WOTC Unit
Workforce Development Administrative Center
430 E Grand Ave., Room 336
Des Moines, IA 50319
(515) 281-9336
E-mail: John.McDonald@iwd.iowa.gov
Energy Rebates
Both Alliant Energy and Midamerican energy offer Rebates and incentives for Small Business Owners.
Alliant Energy
Before you let any more energy dollars go out the window, ask for your free business audit from Alliant Energy-IPL. They will send a certified energy expert to inspect your business. The energy expert will help you identify ways to reduce your energy use, give you estimates on how much improvements will cost and how much you can expect to save. Before you let any more energy dollars go out the window, ask for your free business energy audit from Alliant Energy-IPL.
How does the program work?
The energy expert will analyze many features of your business, including:
-
Building construction & tightness
- Heating and cooling systems
- Insulation levels
- Lighting
- Water heating equipment
- Windows and doors
You will learn how to save energy throughout your business, plus if applicable, the energy expert may install one or more of the following energy-efficient technologies:
- Retrofit LED exit sign
- Occupancy sensor
- Compact fluorescent light bulbs
- Water heater insulation blanket
- Vending machine controller
- Pre-rinse sprayer
Schedule your free energy audit now by calling: 1-866-ALLIANT (1-866-255-4268) Monday – Friday.
Other small business rebates and incentives are available by clicking here or downloading their brochure.
MidAmerican Energy
Looking to replace your existing lighting with energy efficient lighting? Or installing energy efficient windows and doors? Then MidAmerican Energy offers rebates that can help! Click here to see a list of all of their rebates and incentives for small businesses.
Call 800-894-9599 to speak with a representative.