Economic Development

Tax Credit & Local Incentives

Muscatine offers tax abatement and tax rebates of property taxes to qualifying companies. This is accomplished by the five-year Industrial Tax Abatement or by creating an Urban Revitalization District that provides a 10-year tax exemption schedule. The community can create a Tax Increment Financing District and provide Tax Increment Financing by reallocating to the project company a portion of the property taxes generated that are an increase over the base valuation determined in the tax increment area.

The community has a designated Enterprise Zone intended to incentivize economic development in a given area of the community that provides tax abatement similar to the Urban Revitalization District.

Industrial Tax Abatement


Industrial Tax Abatement of 5 years is structured in a declining scale of taxes abated.  The scale is 75%, 60%, 45%, 30%, and 15% and would be applied to the current levy. The levy is applied to every $1000 of value of the building and land assessment.

The Urban Revitalization District exemption and TIF require a resolution by the local government involved.

The Urban Revitalization District 


The Urban Revitalization District allows for partial real estate tax exemptions over a 10-year schedule.  New construction qualifies for the tax exemption, as does renovation work that increases the actual value of commercial and industrial property by 15%.

The schedule of partial tax exemptions is as follows:

1st year        80% exempt
2nd year       70% exempt
3rd year        60% exempt
4th year        50% exempt
5th year        40% exempt
6th year        40% exempt
7th year        30% exempt
8th year        30% exempt
9th year        20% exempt
10th year      20% exempt

Enterprise Zones


Enterprise Zones allow for partial real estate tax exemptions over a 10-year schedule.  New construction qualifies for the tax exemption, as does renovation work that increases the actual value of commercial and industrial property by 15%.

The schedule of partial tax exemptions is as follows:

1st year        80% exempt
2nd year       70% exempt
3rd year        60% exempt
4th year        50% exempt
5th year        40% exempt
6th year        40% exempt
7th year        30% exempt
8th year        30% exempt
9th year        20% exempt
10th year      20% exempt

Tax Increment Financing (TIF)


Tax Increment Financing (TIF)  can provide funds up-front.  The local government would sell TIF bonds that would be based on the projected assessment and the minimum assessment for the building construction agreed upon by the project company and the local government over a designated number of years.  The TIF amount would be minus the area’s debt service portion of the taxes and it would be minus related bonding costs.

While a TIF payment is received up-front, the property taxes upon which this amount is based are paid annually by the project company. TIF can also be provided as a rebate. This structure has no bond issuance and requires that the project company pay the annual taxes due on the property. The local government then repays the company annually for the taxes paid minus the area’s debt service portion of the taxes. The Rebate is valid for the number of years agreed upon by the local government and is the TIF structure granted more often by the City of Muscatine.

The City of Muscatine has a policy to consider 50% of the TIF levy assessment annually for up to 10 years for an eligible project.  Muscatine County does not have a specific policy.

CITY OF MUSCATINE TIF POLICY (PDF)