Des MoinesCoastal capital buys LightEdge
In 2021 San Francisco fund GI Partners took majority control of LightEdge, a Des Moines data-centre operator with seven sites, buying the stake from Anschutz.
Business Record (Des Moines), 2021
Sell a business in Iowa
The road from today to the years after a sale runs through Iowa's rules. Here it is in the order you will meet them: where you stand, what the state takes, the rules of the sale, who buys, and what the money can do after.
ComplexityMediumTax on the gain3.8% 2025Deal volumeLow
Iowa is a smaller market, with fewer buyers competing for any one business. The state's cut of the gain is modest, 3.8% at the top. Expect a tax-clearance or bulk-sale notice before closing.
Tax on the gain: Flat rate.
Today
Where you stand
Iowa went flat at 3.8 percent and dropped its inheritance tax in 2025, but the old ten-year business capital gain deduction went with it.
About 290,000 small businesses, nearly all of Iowa's firms, with roughly 8,700 opening and 7,700 closing in a year; no deal-volume signal was found.
Small businesses
0
small businesses in Iowa, 99.3 percent of all firms, in the SBA 2025 profile.
SBA Office of Advocacy, 2024
Establishment openings
0
small-business openings against 7,712 closings between March 2023 and March 2024.
SBA Office of Advocacy, 2024
The elements this touches
- TmTime The years before you want out. It feeds the exit-readiness score and never moves the price; every other decision is planned against it.
ListenThe Iowa briefing, read aloud
The deal team on what changes when you sell a business in Iowa.
Before the letter of intent
What Iowa takes
The tax on the gain, and what to settle before a buyer names a price
A flat 3.8 percent on the gain and no inheritance tax from 2025; the capital gain deduction that once sheltered a ten-year business sale now covers only farms.
State tax on the gain
0.0%
Flat rate.
Tax Foundation, 2025
A founder on film
On what he learned about tax on the way to the sale.
Lewis Titus Wastewater purification and manufacturing · Wyoming
A flat 3.8 percent
From 1 January 2025 Iowa taxes all income, including a gain on a sale, at a single 3.8 percent rate.
Inheritance tax gone from 2025
Iowa's inheritance tax, down to a 2 percent top rate in 2024, was eliminated entirely as of 2025.
Gain deduction for farms only
Since tax year 2023 the Iowa capital gain deduction covers only farm real property and certain livestock; a non-farm business sale no longer qualifies.
The rate is the state's top rate on the gain for the year shown, the same figure as the indicator in the hero, so the two can never disagree.
The elements this touches
- TxTax Strategy The deal and entity structure, set before the letter of intent. FNDRS tracks whether it is in place. It never moves the price; it changes what you keep.
- ApAfter-Tax Proceeds What you keep at close. FNDRS records the pre-tax walk-away and the gap to your number. It never moves the price, and the tax on it is a question for your CPA.
Under contract and at closing
The rules of the sale
The rules a sale in Iowa runs under
No bulk-sale statute, but the buyer must withhold for the seller's unpaid sales tax unless the Department certifies nothing is due; non-compete and broker rules were not checked.
01The buyer holds back tax
A buyer of a going business or its stock of goods must ask whether tax is owed and hold back enough of the price to cover it.
Legal Information Institute (Cornell), 2024
02Safe only with a certificate
The buyer is safe only with a certified no-tax-due statement from the Department, or a notarised statement from the seller taken in good faith.
Legal Information Institute (Cornell), 2024
The elements this touches
- LcLegal & Compliance Contracts, licences, and filings in order and enforceable. The FNDRS valuation reads it, and the score moves the multiple.
- DrData Room The documents a buyer will ask for, ready before they ask. FNDRS tracks it in the deal-readiness report card; it decides how fast and how cleanly a deal closes.
One thing you would not guess
Iowa lets a long-serving employee-owner sell their shares in a qualifying Iowa company with no state tax at all on the gain.
An employee-owner who held stock in a qualifying Iowa corporation for ten years can elect to exclude the whole gain from state tax from 2025.
When the process opens
Who buys
Who shows up for a business in Iowa
Coastal private equity buys the larger Iowa companies, while a small in-state fund and family successors take the family-owned ones.
StatewideAn in-state fund buys local
Thirty31 Partners, a private equity firm in Huxley, Iowa, bought family-owned auto parts and vehicle recycler Jerry Carney & Sons in 2025.
PrivSource, 2025
The elements this touches
- SyStrategic Synergy What one buyer gains that another cannot. The buyer at the table prices it, which is why the sell-side process goes looking for them.
Day 0, and the years after
After the close
What Iowa lets the proceeds do
Iowa keeps retirees: from 2023 pension, IRA, and deferred-compensation income is exempt from state tax for anyone 55 or older; trust law was not checked.
Retirement income goes untaxed
Since 2023 Iowa exempts all retirement income, pensions, IRAs, and deferred compensation included, for residents 55 or older or disabled.
WealthWhere FNDRS comes in
The post-exit wealth plan is the third act of the same engagement, and it starts in diligence, before the letter of intent, when a move or a trust can still change the answer.
FNDRSThe elements this touches
- EsEstate Architecture Trusts and ownership set up before the letter of intent. It changes what the family keeps, not what a buyer pays.
- ApAfter-Tax Proceeds What you keep at close. FNDRS records the pre-tax walk-away and the gap to your number. It never moves the price, and the tax on it is a question for your CPA.
People who walked it
Founders
Founders who worked with FNDRS, in their own words
From founders elsewhere
What founders say about working with FNDRS
No founder in Iowa is quoted yet. These are founders in other states, quoted word for word, each described by role and state.
1 of 3
“I definitely don't think we'd be in the same spot without you guys.”
No founder in Iowa is on film yet. These are founders in other states who worked with FNDRS.47 founders on film
Nearby
Other states in the Midwest
| Midwest | Tax on the gain | Complexity | Deal volume |
|---|---|---|---|
| Illinois | 4.95% 2025 | High | Very high |
| Indiana | 3% 2025 | Low | Medium |
| Kansas | 5.58% 2025 | Medium | Low |
| Michigan | 4.25% 2025 | Medium | High |
| Minnesota | 9.85% 2025 | High | Medium |
| Missouri | None 2025 | Low | Medium |
| Nebraska | 5.2% 2025 | High | Low |
| North Dakota | 2.5% 2025 | Low | Very low |
| Ohio | 3% 2025 | Medium | High |
| South Dakota | None 2025 | Low | Very low |
| Wisconsin | 7.65% 2025 | Medium | Medium |
Your next step
The road starts with one step
Know where you stand in fifteen minutes, or talk the Iowa sale through with a dealmaker. Either way, no pitch and no obligation.
Selling in Iowa? Start with a conversation
No pitch and no obligation. If the honest answer is not yet, we will say so, and say what to work on.