Iowa

Despite its modest tax base and economically distressed rural counties, Iowa provides generous subsidies to businesses, especially data centers. Companies such as Facebook, Apple, and Microsoft are attracted to the state by low energy costs and cheap, available land, but the state and localities keep subsidizing their facilities with property tax abatements, job creation tax credits, and sales tax exemptions. Iowa also subsidizes the operations of agribusiness companies.  Despite being a rural state, Iowa has over 700 Tax Increment Financing (TIF) districts.  

The Iowa Economic Development Authority (IEDA), a public agency overseen by a public-private board, plays a major role in state subsidy administration and monitoring; it also partners with community colleges to manage and pay for company training programs. The Department of Revenue (DOR) administers payments of tax-based subsidies. 

Iowa does not provide any recipient-level transparency for its data center subsidies, but it does have good recipient level disclosure for its other major programs, such as High-Quality Jobs and the Targeted Jobs Withholding Tax Credit. The Iowa Department of Management (DOM) hosts on its website a public database of all TIF district in the state, and it publishes annual TIF reports. 

The DOM provides localities with guidance on GASB Rule 77 implementation. Consequently, there is good disclosure of abatement costs. The state GASB 77 reports list several programs, and many school districts and localities include revenue lost to TIFs. The state’s Tax Expenditure Reports include aggregate costs of tax-based subsidies, but those reports are produced every five years.  

DOR also evaluates tax-based subsidies on a five-year cycle. Those evaluations are rigorous and include feedback from “advisory panels” that include public officials, academics, and industry experts.