Iowa Owed $7.5 Million For Tax Incentives Given Businesses

By: The Associated Press Email
By: The Associated Press Email

Companies that received incentives from Iowa in the past decade, but failed to deliver the jobs and investment they promised owe the state $7.5 million.

The Cedar Rapids Gazette reports the amount owed is about 11 percent of the total incentives paid. But some of the companies that owe Iowa money folded, so there's little recourse for the state.

Iowa handed out $67.6 million between 2003 and June 30, 2012 mostly in the form of low-interest or forgivable loans. State economic development spokeswoman Tina Hoffman says incentives help Iowa attract businesses.

Starting a business is risky and half of all small businesses fail in their first five years.

Curt Nelson with the Entrepreneurial Development Center in Cedar Rapids says he expects to lose three out every 10 start-ups that get incentives.

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