Emmetsburg, Iowa - Economic Development - Iowa Enterprise Zone Program

Iowa Enterprise Zone Program

Palo Alto County in Iowa is fortunate to be designated as an Enterprise Zone. This designation helps to stimulate economic development by offering state and local tax benefits to businesses and developers who are making new investments in these areas. Read about this program below or contact Emmetsburg Economic Development at 712-852-2262 or comdevl@ncn.net for more information.

Promoting Development in Economically Distressed Areas
Prepared by Iowa Department of Economic Development
www.whatworksiowa.org

An Incentive for Business Expansion
An Incentive for Developers
An Incentive for Housing Development

An Incentive for Business Expansion

Enterprise Zones stimulate economic development by targeting economically distressed areas in Iowa and offering state and local tax benefits to businesses and developers who are making new investments, creating new jobs, and building and rehabilitating housing in these areas. The goal of the program is to rebuild these areas and make them competitive with other locations throughout the state. A map showing Iowa counties and cities that have established Enterprise Zones is available from the Iowa Department of Economic Development (IDED) at www.whatworksiowa.org

Businesses locating or expanding in an established Enterprise Zone may be eligible to receive certain local and state tax benefits.

Eligibility Requirements

The business must make a minimum capital investment of $500,000.
The business must create at least 10 full-time, project-related jobs and maintain them for at least 10 years.
The business must provide all full-time employees with the option of choosing a standard medical and dental insurance plan of which the business pays 80 percent of the premiums or a monetarily equivalent benefit.
The business must pay an average wage that meets or exceeds 90 percent of the average county or regional wage, whichever is lower. (Check with IDED for the community’s current wage requirement.)
The business can not be a retail establishment or a business whose entrance is limited by cover charge or membership.
The business can not close or reduce its operation in one area of the state and relocate substantially the same operation in the Enterprise Zone.
The local Enterprise Zone Commission and the IDED must approve the business’ proposed project prior to project initiation.

Tax Benefits

A local property tax exemption on the value added to the property.
Additional funding for training new employees. If applicable, these funds would be in addition to those authorized under the Iowa New Jobs Training Program.
A refund of state sales, service or use taxes paid to contractors or subcontractors during construction.
An investment tax credit of up to a maximum of 10 percent of the new investment in machinery and equipment, land, buildings, and improvements to existing buildings. This Iowa tax credit may be carried forward for up to seven years or until depleted.
An additional research and development tax credit of up to 6.5 percent, which may be refundable. This Iowa tax credit is based on increasing research activities within the state and is available while the business is participating in the program for up to 10 years.

An Incentive for Developers

Developers and development contractors constructing, expanding or rehabilitating industrial or commercial buildings in an established Enterprise Zone may be eligible to receive certain local and state tax benefits.

Eligibility Requirements

The developer or development contractor must construct, expand or rehabilitate a building space to be used for manufacturing, processing, cold storage, distribution or office facilities within a certified Enterprise Zone. The building space cannot be occupied by a retail business.
The developer or development contractor must make a minimum capital investment of $500,000.
Prior to applying for benefits, the developer or development contractor must enter into a lease agreement for a minimum of five years with a business that meets certain requirements, such as job creation, wage levels, employee benefits, etc. (Contact IDED for more information about the requirements the lessee must satisfy.)
The developer or development contractor must receive approval from the local Enterprise Zone Commission and IDED before benefits may be claimed.

Tax Benefits*

The developer may receive a local property tax exemption on the value added to the property.
The developer may receive a refund of state sales, service or use taxes paid on construction materials and on utilities used during construction.
The developer may receive an investment tax credit of up to a maximum of 10 percent of the new investment. “New investment” includes the purchase price of land and the cost of improveme3nts to real property. This Iowa tax credit may be carried forward for up to seven years or until depleted.

*Benefits will be prorated based on the percentage of the building space leased to qualified businesses.

An Incentive for Housing Development

Developers and contractors building or rehabilitating housing in an established Enterprise Zone may be eligible to receive certain state tax benefits.

Eligibility Requirements

The developer or contractor must build or rehabilitate at least four single-family homes or at least one multifamily building containing three or more units in a certified Enterprise Zone.
The housing must be modest homes or units and include all the necessary amenities.
The housing must, when completed and made available for occupancy, meet HUD Housing Quality Standards and local housing codes.
The housing project must be completed within two years of the start of construction or rehabilitation.
The local Enterprise Zone Commission and IDED must approve the proposed housing project prior to project initiation.

Tax Benefits

The developer or contractor may receive a refund of state sales, service or use taxes paid during construction.
The developer or contractor may receive an investment tax credit of up to a maximum of 10 percent of the investment directly related to the construction or rehabilitation of the housing. The tax credit is based on the new investment used for the first $140,000 of value for each home or unit.* This Iowa tax credit may be carried forward for up to seven years or until depleted.

* If the project is, in part, financed through federal, state and local government tax credits, grants and forgivable loans, these monies can not be included for4 purposes of calculating the investment tax credit.

For additional information regarding the Enterprise Zone Program or to receive an application, contact:

Steve Heldt
Economic Development Director
2021 Main Street
Emmetsburg, IA 50536
712-852-2262
commdevl@ncn.net

or call
Iowa Department of Economic Development
515-242-4735

City of Emmetsburg
2021 Main St
Emmetsburg, IA 50536
(712) 852-4030