When Should Iowa Manufactures Be Concerned About Business Personal Property Taxes?

We don’t often get many questions about valuing machinery and equipment in Iowa since it isn’t taxable as business personal property.  However, it can be very important if you own additional factories in states where business personal property tax is applied and often overlooked as an important way to reduce taxes. Valuing this property for tax purposes has added complexity based on the type of equipment, industry, age, technology, and even the particular make, and model.

Increased M&A activity and reshoring production may be opportunities for you to consider a review.  For example, a recent Reshoring Initiative survey found increased reshoring activity among both original equipment manufacturers (OEMs) and contract manufacturers, with 63% of surveyed OEMs planning U.S. capital investment through 2027. The reasons extend beyond tariffs and geopolitical concerns. Manufacturers reported benefits from reshoring that included faster speed to market, improved delivery performance, and lower logistics costs. As manufacturers expand domestic capacity, this investment can create additional demand for machinery and equipment.

However, that demand is not evenly distributed. In the used CNC (Computer Numerical Control) market, certain 5-axis machining centers, multi-spindle turning centers, large horizontal machining centers, and wire EDM equipment are experiencing stronger demand, while more readily available 3-axis vertical machining centers, older CNC lathes, and CNC routers have faced softer market conditions. Higher new equipment costs are also making quality used machinery an attractive alternative for manufacturers looking to add capacity. Buyers continue to place a premium on equipment that is productive, well maintained, supported, and easily integrated into their operations.

At Swartz + Associates, Inc., these trends reinforce why market research is such an important part of the appraisal process. Age and original cost provide useful information, but they don't necessarily tell us what an asset is worth today. We also consider specifications, conditions, technological obsolescence, marketability, and what is actually occurring in the secondary market for that particular type of equipment. As reshoring, technology, and capital investment continue to influence manufacturing, we would be happy to provide a second opinion on the equipment’s value for tax purposes. 

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