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STARTING AND OPERATING A BUSINESS IN IOWA Copyright © 2000, Michael D. Jenkins
CONTENTS OF THIS CHAPTER:
I. INTRODUCTION I. INTRODUCTION Iowa has a fairly typical tax and legal structure under which businesses must operate. While both individual and corporate tax rates are fairly high, Iowa has no general state franchise tax or property taxes on business personal property, and has repealed its bulk sales law on business purchases. Like most states, Iowa imposes an income tax on individuals and corporations, a sales and use tax, and various excise taxes, with property taxes imposed at the local level. The state has also adopted a limited liability company (LLC) law, and a limited liability partnership (LLP) law, so that businesses operating in Iowa in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. Unlike many states, however, Iowa has no franchise tax, except on certain financial institutions, and no property tax on either tangible or intangible personal property. At present, the state's economy is exceptionally robust, in terms of the level of unemployment, among the lowest of any state in the nation, and other economic measures. For example, in March, 2000, the state's unemployment rate was only 2.1%, down from 2.7% a year earlier. This compares to a national unemployment rate of 4.1%. To view the latest federal Bureau of Labor Statistics unemployment rate data for Iowa or any other state, visit the BLS website. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Iowa can operate as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes S corporations, for income tax purposes, and generally allows the income or losses of an S corporation to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity. Iowa also provides for limited liability partnerships, in which no partner is liable for debts of the partnership, in general, as in the case of a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In general, sole proprietorships in Iowa can be formed with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well. No separate tax form filing is required, generally, for a sole proprietorship, under the Iowa income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Iowa income tax and filing requirements for individuals. (c) Partnerships. As a rule, general partnerships in Iowa can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Iowa law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the Iowa Secretary of State, together with a filing fee of $100. Foreign limited partnerships must also register before being allowed to do business in Iowa, and must pay a registration fee of $100 with the registration application. For information on limited partnership filing requirements, see the contact information for the offices of the Iowa Secretary of State, listed in Section VI(a). Limited liability partnerships (LLPs) are a new form of partnership permitted under the laws of Iowa. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Iowa state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. To form an LLP in Iowa, you must register and pay a filing fee of $50 to the secretary of state. Foreign LLPs, those created under the laws of another state, must register with the secretary of state and must pay a fee of $100. For more information on LLP registration and reporting requirements, see the contact information for the offices of the secretary of state, listed in Section VI(a). Note that one potential drawback of LLPs, if you will do business in other states besides Iowa, is that some states, like California and New York, only recognize certain types of professional partnerships as LLPs. If yours is not a professional partnership, such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
Partnerships, as entities, are not subject to state income tax in Iowa. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). Partnerships are required to file an annual tax information return with the state. For details on Iowa partnership tax return filing requirements, see Section IV(c). (d) Corporations. To form a corporation in Iowa, you must file articles of incorporation with the Iowa Secretary of State and pay a fee of $50. A foreign corporation (one that is formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Iowa, by filing an application for a certificate of authority and paying a filing fee of $100. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Iowa, see the contact information for the offices of the secretary of state, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file biennial reports every other year and a filing fee as determined by the secretary of state, currently $45. Failure to file this report on a timely basis can result in suspension or revocation of your corporation's charter. In addition to paying federal income taxes on its income, a corporation that does business in Iowa must also file corporate income tax returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and tax return filing requirements. Banks and certain other financial institutions that do business in Iowa are subject to a corporate franchise tax. However, there is no general state franchise tax on other corporations. For tax forms and more information on corporate income taxes in Iowa, see the contact information for the offices of the Iowa Department of Revenue and Finance, listed in Section VI(a). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns. Iowa recognizes S corporations for income tax purposes, and treats them in a manner similar to the federal tax treatment. (f) Limited Liability Companies. Iowa, like every other state, has now adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Iowa may also choose to operate in the form of an LLC. In most states, LLCs are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes. See Section IV(c) for a discussion of the income tax treatment of LLCs under Iowa tax laws. To form an LLC under the laws of Iowa, one or more persons, not necessarily members, must file articles of organization with the secretary of state, which must be accompanied by a filing fee of $50. Iowa law was amended in 1997 to permit an LLC to have only one member. Foreign LLCs, those formed under the laws of another state, must obtain a certificate of authority to do business in Iowa, by filing an application for a certificate of authority with the secretary of state and paying a filing fee of $100. For more information on filing articles of organization for an LLC, see the contact information for the offices of the secretary of state, listed in Section VI(a). III. BUSINESS ACQUISITIONS. (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Iowa is one of the states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Iowa. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Iowa, you should require the seller to obtain a tax release for state unemployment tax, from the Division of Job Service of the Iowa Department of Workforce Development, to avoid being held liable for the seller's unpaid state unemployment tax, if any. The release will inform you as to whether no tax is to be withheld, or the amount of tax that is to be withheld. There is no specific sales tax release form in Iowa, but state law requires the seller of a business to file a final sales and use tax return within one month after the sale, and to pay all tax due. You need to be sure, as buyer, you withhold enough tax to cover any sales tax liability, which may involve an escrow or holdback of the purchase price until the seller's final return has been filed and the tax paid. Contact the Iowa Department of Revenue and Finance for further information on how to determine if you are withholding a sufficient amount for unpaid sales and use taxes. (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to apply within 30 days of sale to the Division of Job Service of the Department of Workforce Development, requesting that you be treated as a successor employer. This can be done by filing Form 60-0126, Report to Determine Liability, the same form that you need to file as a new employer, to register for unemployment tax, or, as it is called in Iowa, "job insurance." IV. IOWA TAXES AND OTHER GENERAL REQUIREMENTS. (a) In General. Iowa has the usual complement of business taxes, except that there is no franchise tax on corporations, other than financial institutions, and no personal property tax on either tangible or intangible property owned by a business. While the state sales tax is relatively low, at 5%, and local sales taxes cannot exceed 1% (with no local use tax), income tax rates are quite high, with a top rate of 12% on corporate income and 8.98% on individual income. (b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees. However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis. State governments have also traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Iowa has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing. For information on state licensing and business registration requirements in Iowa, see the contact information for the Business License Information Center, listed under the Small Business Resource Office's Small Business Hotline in Section VI(a); or, you can contact the Labor Market Information Bureau at the address listed for it in Section VI(a). (c) Income and Franchise Taxes. Iowa has both an individual income tax and a corporate income tax. The Iowa individual income tax is imposed at a maximum tax rate of 8.98%. Tax rate brackets are adjusted each year to reflect inflation. For 2004, the top tax tax rate bracket begins at $55,890 of taxable income. Individual taxpayers generally pay state income tax on their business earnings from a sole proprietorship, or on their share of the earnings of a pass-through entity, such as a partnership, S corporation, or LLC. The Iowa personal income tax return is Form IA-1040, which must be filed with the Iowa Department of Revenue and Finance by April 30 each year. State law also allows school districts to impose a surtax of up to 20% on the income of a resident of the school district. Many districts do so, although mostly at much less than the maximum allowable 20% surtax rate. Partnerships, or entities taxable as partnerships, such as LLCs, are not subject to state income taxation in Iowa, but must file an information return with the Department of Revenue and Finance each year, showing each partner's share of taxable income, losses, and credits, on Form IA-1065. Individual taxpayers doing business as sole proprietors, or who are partners in partnerships, or members of LLCs, are required to make payments of estimated Iowa individual income taxes, if their net tax liability (not covered by withholding) exceeds $200. Estimated tax payments are due in four installments, on the last day of the 4th, 6th, and 9th months of the taxable year, and the last day of the first month of the following year. The Iowa corporate income tax rate, on corporations other than S corporations, is imposed at graduated rates, rising from 6% on the first $25,000 of taxable income to as high as 12% on income over $250,000. The state corporation income tax return is Form IA-1120, which must be filed with the Department of Revenue and Finance by the last day of the fourth month following the end of the taxable year, or by April 30th in the case of a corporation whose taxable year is the calendar year. Corporations are required to make estimated tax payments of their state corporate income tax in advance, if their tax liability for the year equals or exceeds $1,000. Estimated tax payments are due in advance, in four equal installments, on the last day of the 4th, 6th, 9th, and 12th months of the taxable year. Penalties will be imposed for failure to make the required estimated tax payments on a timely basis. However, if the preceding year was a full year of 12 months, the current year payments need only be equal to 100% of the prior year's tax liability, if less, to avoid an underpayment penalty. In Iowa, a limited liability company (LLC), is taxed in the same manner as a partnership, thus avoiding the possible double taxation of income that can occur with a corporation. One-member LLCs are now recognized as LLCs under Iowa law, effective since July 1, 1997. (d) Sales and Use Tax. Iowa imposes a general sales tax on retail sales of tangible personal property and certain other gross receipts at the statewide rate of 5%. County and city governments are also allowed to adopt local sales taxes, at tax rates of up to 1% (but no local use tax is permitted). Sellers are required to obtain a seller's permit for each place of business and to collect and pay over the state and local sales and use taxes to the Iowa Department of Revenue and Finance. There is no fee for the permits. There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer. Iowa has repealed the sales tax on Internet access services, effective since July 1, 1999. Sales tax returns must be filed quarterly, if a taxpayer remits between $120 and $6,000 a year of sales tax, or monthly, if annual tax remitted is more than $6,000 but less than $60,000 a year. Monthly filers must file returns and pay over tax for the first two months of each calendar quarter, but no tax deposit is required for the third month. Instead, the tax for the third month is paid with the quarterly return. If the annual tax remitted is $120 or less, only an annual filing is required. Large taxpayers who remit more than $60,000 of sales tax per year must file semi-monthly returns and make semi-monthly deposits by electronic funds transfer (EFT). A shadow tax, the use tax, is also imposed at the same rate (5%) as the sales tax, but there are no local use taxes. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Iowa. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold. Before making any taxable sales, you will need to register with the Iowa Department of Revenue and Finance on the Iowa Business Tax Registration form, which also registers your LLC, partnership, or corporation to receive appropriate income tax forms, and, if you have employees, registers you as an employer for state income tax withholding purposes. For more information on Iowa sales and use tax registration and compliance, see contact information for the offices of the Department of Revenue and Finance, listed in Section VI(a). (e) Real and Personal Property Taxes. In Iowa, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due. Iowa, unlike most other states, does not impose any property taxes on personal property of any kind, either tangible or intangible. (f) Other Business Taxes. Iowa imposes a number of other taxes on businesses, including:
(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group." In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name. In Iowa, if you conduct business under an assumed name, other than as a corporation or LLC, you must generally file an assumed name certificate with the county recorder's office in each county where you do business. A corporation or LLC using an assumed name must register with the Iowa Secretary of State. There are small county and state registration fees for registering an assumed name. V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. Since Iowa imposes a state income tax on the income of individuals, you will need to also withhold Iowa income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Iowa Department of Revenue and Finance, on their Iowa Business Registration form, on which you can also register for a sales and use tax permit or the automobile rental tax, if applicable. For more information on Iowa income tax withholding and registration requirements for employers, see the contact information for the offices of the Iowa Department of Revenue and Finance, listed in Section VI(a). (b) Unemployment and Other State Payroll Taxes. If your business employs one or more individuals in each of 20 weeks during any calendar year or if your payroll amounts to $1,500 in any calendar quarter, you, as an employer will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Iowa unemployment (job insurance) tax are required to register with the Division of Job Service, Iowa Department of Workforce Development, on Form 60-0126, Report to Determine Liability. New employers are required to pay tax at a rate of 1% (or 7.5% for construction) in 2000 on the first $17,300 of wages paid to each employee. Also, there is an additional 0.05% surcharge on all employers. After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. All state unemployment taxes are imposed upon you as the employer, and, under Iowa law, cannot be charged to your employees or withheld from their wages. For more information on your Iowa unemployment tax obligations as an employer, see the contact information for the offices of Division of Job Service, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Iowa, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor or a partner in a partnership is generally not considered an employee. Also, up to four officers per corporation, the president, vice president, secretary, and treasurer, may voluntarily elect in writing not to have coverage. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage. For more detailed information regarding your obligations as an employer under the Iowa workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Division of Industrial Services of the Iowa Department of Workforce Development, listed in Section VI(a). (d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they will still generally be subject to the Iowa wage-hour laws, which provide for a state minimum hourly wage that is currently $5.15 an hour. The state minimum wage is never less than the federal, so that any increase in the federal minimum wage will automatically increase the Iowa minimum wage. Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Iowa wage-hour rules, and other federal exemptions generally apply, with certain modifications. Besides the federal wage-hour posters that you must display in the workplace, you must also display a state wage-hour poster, which you can obtain from the Iowa Department of Workforce Development. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be aware of similar state child labor laws, in Iowa. In particular, be aware that work permits are required for any children under age 16 who you may wish to employ. (e) State Occupational Safety and Health Laws. Nearly half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states. Iowa is one of the states that has its own OSHA-type agency. To determine if your workplace is in compliance with federal and Iowa job safety requirements, you may wish to contact the Division of Labor Services of the Iowa Department of Workforce Development and request a free on-site safety consultation. Consultations are provided by the Consultation Bureau, which is entirely separate from the Enforcement Bureau of the Division. Thus, you will not be cited for any violations detected, provided that you promptly correct the unsafe conditions. This differs from the rules for consultations by federal OSHA inspectors, who are required to cite you for any violations they find. The Division of Labor Services acts like a state version of federal OSHA, enforcing the Iowa Occupational Safety and Health Act of 1972, which closely follows federal OSHA, and will even provide you the required federal job safety posters. As under federal law, must firms with ten or fewer employees are exempt from most IOSHA record keeping requirements. For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, see the contact information for the Des Moines offices of the Division of Labor Services, listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Iowa labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to terminated employees. Iowa law requires that, if an employee is terminated, he or she must receive final wages not later than the next regular payday. Unless otherwise agreed in writing, payday must be no later than 12 days after the period for which the wages were earned. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Iowa has a right-to-work law. (3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Iowa, and display a poster informing employees of their rights. You can obtain this poster from the Des Moines office of the Iowa Civil Rights Commission, at the address listed in Section VI(a). (4) Reporting new hires. Under new federal welfare
reform laws, employers in all states are now required to
report newly-hired (or rehired) employees to a designated
state agency (the Iowa Department of Human Services,
Centralized Employee Registry, for Iowa employers) within
20 days after the date of hire.
VI. STATE SOURCES OF HELP AND INFORMATION. (a) Key State Agencies Contact Information. Unlike most other states, Iowa does not have a single agency to whom you can go to handle all your licensing and permitting requirements for your business under the laws of Iowa. Accordingly, you will need to contact the various Iowa state government agencies that are mentioned in this book and listed below on an individual basis, to obtain needed forms, official posters, information and other assistance from each such agency. However, a good starting place for licensing information is the Business License Information Center, which can be reached through the Small Business Helpline of the Iowa Small Business Resource Office listed below:
Also, you can register your business with the state for Iowa income tax, sales and use tax, employer withholding, and miscellaneous other state taxes on a single state application form, the Iowa Business Tax Registration form. Addresses and other contact information for other key state government agencies mentioned in Sections I through V above, are listed below for your convenience. SECRETARY OF STATE. Contact this office for information on:
STATE LICENSES. Call the Small Business Hotline at the Business License Information Center (BLIC), at the number listed above for the Small Business Resource Office, of which the BLIC is a part. Also, request the comprehensive booklet on state licensing fees and requirements, entitled Iowa Licensed Occupations, from the following agency:
STATE SALES TAX. Obtain your sales and use tax permit and information on the Iowa sales and use tax law from the Iowa Department of Revenue and Finance, at the address listed above for that agency. EMPLOYER WITHHOLDING. Contact the Iowa Department of Revenue and Finance to a form for registering as an employer, for purposes of Iowa income tax withholding. See the address listed above for that agency. STATE UNEMPLOYMENT TAX. Contact the Iowa Department of Workforce Development to determine whether you are an employer subject to payment of state unemployment taxes, and for registration as an employer if you are subject, at the address listed above for that agency. NEW HIRE REPORTING. The Iowa Department of Human Services, Centralized Employee Registry, is responsible for receiving reports of new hires, within 20 days after you hire any employee. You can register on-line as an employer and submit new hire reports via the Internet, at the ICER web site listed in Section VI(c). Reports of new hires can also be mailed or faxed to:
WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the Division of Industrial Services of the Iowa Department of Workforce Development, for further information. STATE OSHA PROGRAM. For information on both federal and state occupational safety and health laws that affect you as an employer in Iowa, contact the Division of Labor Services of the Iowa Department of Workforce Development, at the address listed above for that agency. STATE ANTI-DISCRIMINATION AGENCY. For information on Iowa civil rights laws and required ant-discrimination posters, contact the following agency:
(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Iowa to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the SBDC below for information, or for the location of other SBDCs nearer to you.
(c) Internet Sites. If you have access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Iowa. Since new sites are appearing constantly, you might also want to search for other Iowa government Web sites by using one of the popular Internet search engines, such as Excite! or Yahoo. To start your Internet search for Iowa government information, you may want to begin with the following Internet sites: State of Iowa Home Page: Small Business Resource Office (Iowa Department of Economic Development): Iowa Department of Revenue and Finance: Iowa Tax Research Library: Iowa Workforce Development: Iowa Centralized Employee Registry (ICER) System (for reporting new hires): Iowa Department of Economic Development (financing info):(d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Iowa, or contact the following state agency, which can provide you information on all state loan programs.
The address of the main SBA Office in Iowa is:
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Copyright © 2000 Michael D. Jenkins
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