With wind tax revenue, local counties improve infrastructure, complete special projects

NEVADA, IOWA – Over the last 20 years, the windy fields of Iowa have allowed a new kind of opportunity to grow. In 2021, the state boasted the second-largest wind production in the nation and annually generates approximately $57 million in tax revenues for state and local taxing bodies and $67 million in lease payments to landowners. 

Demand for renewables is expected to increase in the coming years. That’s good news for rural communities that collect property taxes on wind energy systems within their county’s borders. In Iowa, taxes from wind energy are collected based on the cost to build the systems rather than on their actual production, which provides consistent tax revenue to local governments over the lifetime of the systems.

“Wind energy has been a part of Iowa’s landscape for decades and has provided significant economic benefits,” said Alex Delworth, policy associate for the Center for Rural Affairs. “The revenue has been used to support special projects and increase funding to regular taxing bodies like public schools and emergency services”

The Center’s new report, “Windswept Fields of Opportunity: Iowa Wind Energy County Tax Impact Studies,” authored by Delworth, offers case studies on three Iowa counties—Story, Ida, and Marshall—examining development within the county, the financial impact of the wind projects, and how counties used the wind energy tax revenue.

Delworth said the Center chose the three counties because of the different amounts of wind development in each and the method by which they collected the tax. Story and Ida counties, for example, used a tax increment financing method to fund $50 million worth of special projects, with Story spreading out the revenue for several public works projects and Ida focusing on a small number of distressed county highways. Marshall taxed wind energy projects like any other property, which increased funding to regular taxing bodies, Delworth said. 

While counties across Iowa collect and use the tax differently, the Center’s report shows the revenue is making an impact in rural areas.  

“The wind tax revenue has allowed counties to increase funding to essential services, make infrastructure improvements, and pay for special projects without raising the tax burden on local community members,” Delworth said. 

To learn more, view and download the “Windswept Fields of Opportunity: Iowa Wind Energy County Tax Impact Studies” report and report recap at cfra.org/publications.