Iowa City, Coralville, and North Liberty City Councils have all chosen to put a 1% Local Option Sales Tax (LOST) on the ballot this fall. Our three largest municipalities are among only 17 cities in the entire state of Iowa not collecting this tax. A local option sales tax will help us capture and reinvest what visitors are already spending in Johnson County and allow each community to fund what matters to their residents.
Capturing Visitor Spending
University athletics, great shopping, cultural events, and more draw millions of visitors to our area every year. In 2024, Johnson County saw 5.1 million visitors – and those visitors made nearly 30 million trips to individual stores and restaurants. That is a massive influx of visitor spending, especially compared to the approximately 152,000 people who live in Johnson County.
In 2023, visitors spent more than $458 million in Johnson County. That’s nearly $3,000 spent for every one Johnson County resident.
If all three cities pass a local option sales tax, they will collectively receive over $22 million dollars every year. Right now, we are missing out on this revenue stream to which outside visitors significantly contribute.
Local Option Sales Tax is a Proven and Popular Funding Tool
Almost every other city in Iowa collects a local option sales tax. In Johnson County alone, six communities have a local option sales tax: Lone Tree, Solon, Swisher, Tiffin, University Heights and West Branch. This places Iowa City, Coralville, and North Liberty in the extreme minority.
Local option sales tax does not apply to the following: groceries, utilities, gasoline, hotel and motel rentals, prescription drugs. It requires at least 50% of voters to vote yes to pass.
A local option sales tax is a proven and popular funding tool, providing cities flexibility to fund what matters to their residents.
Funding What Matters
State law requires that half of local option sales tax revenue must go toward property tax relief. Our city councils, informed by community feedback and their strategic plans, have chosen the following priorities for the remaining revenue:
- Iowa City: Affordable housing, initiatives to support community-wide nonprofit partnerships, and public infrastructure such as streets, sidewalks, trails, parks, and facilities.
- Coralville: Capital projects, including a new recreation center, parks and trails, and affordable housing.
- North Liberty: Capital projects, including a new fire station, parks and trails, and affordable housing.
For specific ballot language, visit the Johnson County election webpage and select your city.
These are already identified needs – not items on a wish list. Visitors are already spending millions of dollars in Johnson County every year, and we can use the new revenue from local option sales tax to fund these important projects that directly benefit our community.
Local Makes Sense Yes Campaign
Greater Iowa City, Inc. supports the addition of a local option sales tax as a way for cities to diversify revenue sources and capture visitor spending. The 50% allocation for property tax relief allows cities to pursue important capital projects without needing to increase property tax rates to pay for them. It also provides for local control and lets each city choose how to use the funds to meet their strategic priorities.
A campaign committee has formed to encourage voters in Iowa City, Coralville, and North Liberty to vote “yes” for a local option sales tax in November. Be on the lookout for further information in the coming weeks. If you would like to support the campaign effort, email yeslocaloption@gmail.com.
