LLC Cost In Iowa - How Much To Pay In Fees & Taxes in IA
In 2021, Iowa broke its record for the number of registered businesses in the state indicating that more and more people want to form an LLC here.
It's not that hard to open a limited liability company, but you may have a question, “how much is an LLC in Iowa?” We will answer it in detail, taking into account not only the cost of the registration but also the following:
- The registered agent's fee;
- LLC costs in Iowa for taxes and annual reports;
- Prices for additional services.
Thus, after reading this article, you will understand how much money it takes to form an LLC and keep it in compliance with state requirements and regulations.
Table of Content
- 1 How Much Does an LLC Cost in Iowa?
- 1.1 Iowa LLC Online Filing Fee: $50
- 1.2 Iowa Biennial Report Fee: $30
- 1.3 Registered Agent (Agent for Service of Process, Resident Agent) Fee
- 1.4 Cost to Form a Foreign LLC in Iowa
- 1.5 Cost to Form a Series LLC in Iowa
- 1.6 Cost to Form a PLLC (Professional LLC) in Iowa
- 1.7 Iowa Income Tax
- 1.8 Corporate Income Tax
- 1.9 Sales and Use Tax
- 1.10 Franchise Tax
- 2 Other LLC Filing Costs
- 3 FAQ
How Much Does an LLC Cost in Iowa?
First, let's break down exactly what you'll have to spend money on before and after registration. Let's look at costs for both domestic and foreign LLCs.
| Service | Cost |
|---|---|
| Domestic LLC | 50$ |
| Foreign LLC | 100$ |
| Series LLC | 50$ |
| Professional LLC | 50$-100$ |
| Filing a biennial report | 30$-45$ |
| Name reservation | 5$ |
| DBA registration | 10$ |
| Certificate of Standing | 5$ + 1$ зa cтpaницy |
| Certified copies of Articles of Organization | 5$ |
Iowa LLC Online Filing Fee: $50
To be eligible to do business in the state of Iowa, a company owner must get a Certificate of Organization (also known as Articles of Organization). This requires filling out a Certificate form on the Secretary of State's website, paying Iowa LLC fees, and submitting the file.
The application is filled out by the organizer or organizers. They sign it and send it to the Secretary of State along with a check for payment of the fees.
You should include the following data in the document:
- The legal name of your LLC in accordance with Section 489.108;
- Registered office address;
- Registered agent data.
How much is an LLC in Iowa online? It’s 50$.
You can hire a special LLC formation service if you don’t have enough time or knowledge to file the Certificate of Organization yourself. The cheapest way to start an LLC in Iowa though is to prepare and send the documents yourself.
The Secretary of State's processing time is usually 7-14 days, but to expedite the process to 5 days, there is an additional $15 fee. Processing in two days costs $50.
Note! The documents can be sent by regular mail at the same cost, but we recommend using the online method as it will save you a lot of time.
Iowa Biennial Report Fee: $30
Many states require limited liability companies to pay a fee for filing an annual report. Meanwhile, Iowa has simplified the system a little bit and requires owners to file a biennial report.
It’s more advantageous to send biennial reports through the Secretary of State's expedited online system:
- Documents are processed immediately;
- Sending the report will cost $30.
Submitting the biennial report by regular mail will cost $45, and processing time can take up to 2 weeks.
The biennial report must be filed no later than April 1 in every odd-numbered year. The first report must be filed from January 1 through April 1 in the first odd-numbered year.
So, if your LLC was established in 2022, then the report must be filed in 2023. Failure to file by August 8 will result in the dissolution of the LLC.
Registered Agent (Agent for Service of Process, Resident Agent) Fee
Iowa law requires each limited liability company to appoint a registered agent to handle legal and tax correspondence.
An owner may designate him or herself as an agent if he or she meets the requirements:
- Is a resident of the state;
- Has a physical address to receive legal correspondence;
- Is willing to be at the registered office at all times during regular business hours.
The owner may also appoint a family member or friend as a resident agent. But we recommend appointing a commercial service, based on the following advantages:
- They have extensive experience in serving processes;
- They focus on quality service;
- They will allow you to maintain confidentiality by providing their data for the Articles;
- They save you the burden of being in the office all the time;
- Their services are affordable, with fees starting at $50 per year.
Cost to Form a Foreign LLC in Iowa
You can register a foreign limited liability company in Iowa by sending an application for a Certificate of Authority to the Secretary of State. This process is known as foreign qualification. What needs to be done?
- Appoint a registered agent;
- Obtain a Certificate of Existence;
- Complete the application for registration;
- Send the application along with the Iowa filing fee for LLC.
Note! It is advisable to obtain a Certificate of Existence closer to the date of application for registration. A document issued more than 90 days in advance may not be accepted by the Secretary of State.
The fee for registering a foreign LLC is $100. Documents can be sent by mail, fax, or online. We recommend sending the application online if you want a quicker decision.
Cost to Form a Series LLC in Iowa
Few states can boast the ability to form a Series LLC in their regions. Fortunately, Iowa does, so what steps should you take to open a Series LLC here?
- Choose a name for each series;
- Appoint a resident agent;
Note! You do not need to designate a registered agent for each series, you can choose one for all of them.
- Complete and submit the Certificate of Organization.
You can submit the documents online, and the Secretary of State will review them almost instantly. Iowa LLC fees for series firms are $50.
Note! Series LLC owners have to draw up an operating agreement, as it is a requirement of the state of Iowa. The document should preferably be drafted with an attorney, so consider it when calculating the cost to register an LLC in Iowa.
Cost to Form a PLLC (Professional LLC) in Iowa
In Iowa, it is possible to form both a domestic professional company and a foreign one. To form a PLLC, you must apply to the Secretary of State for a Certificate of Authority.
Documents are accepted online and by mail, but we recommend sending applications through the Secretary of State's online platform as well, as this method is much faster.
As for LLC pricing in Iowa:
- $50 registration fee to set up a domestic PLLC;
- $100 for foreign PLLCs.
Iowa Income Tax
Owners of limited liability companies pay income tax on all the profit they receive from the business. The interest rate depends on the income and can range from 0.33% to 8.53%:
| Income | Interest rate |
|---|---|
| $0 to $1,676 | 0.33% |
| $1,676 to $3,352 | 0.67% |
| $3,352 to $6,704 | 2.25% |
| $6,704 to $15,084 | 4.14% |
| $15,084 to $25,140 | 5.63% |
| $25,140 to $33,520 | 5.96% |
| $33,520 to $50,280 | 6.25% |
| $50,280 to $75,420 | 7.44% |
| $75,420 or more | 8.53% |
Note! Beginning in early 2021, Iowa imposes penalties on taxpayers who are delinquent on their personal income tax payments. The penalty interest rate will be 6% of annual income or 0.5% per month.
Corporate Income Tax
If your limited liability company is taxed as a corporation, corporate income tax will have to be paid under one of four tax categories:
| Income | Interest rate |
|---|---|
| $0 to $25,000 | 6% |
| $25,000 to $100,000 | 8% |
| $100,000 to $250,000 | 10% |
| $250,000 or more | 12% |
Sales and Use Tax
Iowa imposes a 6% sales and use tax on selling physical goods and certain types of services.
Note! Use tax is only levied on goods/services that are not subject to sales tax.
Franchise Tax
Iowa has a franchise tax, but not all businesses will be subject to it. Only financial enterprises, such as banks, have to pay the franchise tax.
Other LLC Filing Costs
It is important to consider other services that you may need when forming an LLC. Thus, we will describe when and what LLC fees in Iowa need to be paid and why.
LLC Name Reservation
In Iowa, you can reserve an LLC name for 120 days by filing a name reservation application with the Secretary of State. The fee is $5.
You may need to reserve a name when you don't plan to open a limited liability company right away, but want to “safeguard” it until the opening day.
If you register an LLC now, you do not need to apply for a name reservation. By filing the Articles of Organization, the Secretary of State will record the right for you to use your company name in the state.
Foreign LLC Name Registration
The foreign LLC name reservation process is done pretty much the same way as for domestic companies:
- You submit an application to reserve the name for the foreign LLC;
- You pay Iowa LLC filing fees to the Secretary of State.
The name reservation fee for foreign companies is $10.
"Doing Business As" (DBA) Name
Want to do business in the state of Iowa under a fictitious name? Then file a resolution with the Secretary of State to use a fictitious name.
The cost of filing a resolution for domestic and foreign companies is $5.
Certified Document Copies
You can get a certified copy of the Articles of Organization within 2 days, after sending your request to the Iowa Secretary of State. Please note that there is no expedited procedure for obtaining a certified copy of the Articles in the state.
A certified copy can be ordered by mail, fax, online, or by phone. LLC cost Iowa for the document will be $5 + $1 per page.
Certificate of Standing
The Certificate of Good Standing is referred to in Iowa as the Certificate of Standing and can be obtained through the Secretary of State's online system. Other ways to order a Certificate of Standing are also available:
- By mail;
- By fax;
- By telephone;
- In person.
The price of an Iowa Certificate of Standing is $5.