What is the egular local option sales tax (LOST)?
Through June 30, 2008, Iowa’s state sales tax rate was 5%. Beginning July 1, 2008, the state rate is 6%. Local option tax is in addition to the state rate. Local option sales tax has been adopted in most cities and unincorporated areas in Iowa. Local option sales tax is imposed on the gross receipts from sales of tangible personal property. Tax applies if “delivery” of the tangible personal property occurs within a local option sales tax jurisdiction. Local option sales tax is imposed on a taxable service if the service is rendered, furnished, or performed within a local option sales tax jurisdiction. It is important to understand that WHERE the service is performed determines if the local option tax is charged. Out-of-state retailers with a physical presence or nexus in Iowa who make deliveries into Iowa must collect Iowa sales tax. If these deliveries occur in a local option jurisdiction, local option sales tax also applies.
