Beginning July 1, 2026, businesses in Iowa City, Coralville, North Liberty, Shueyville and Oxford will begin collecting an additional 1% Local Option Sales Tax (LOST), bringing the total sales tax rate to 7%.
For many businesses, this change will simply require updates to point-of-sale systems, online checkout settings, accounting software, and internal tax procedures. To help local businesses prepare, the following cities have created guidance to support businesses in with implementation:
City of Iowa City LOST Guidance
City of Coralville LOST Guidance
City of North Liberty LOST Guidance
Local Option Sales Tax collections are not entirely new to Johnson County. Iowa City, Coralville, North Liberty, Shueyville and Oxford join 8 other communities currently collecting the LOST Tax including: Hills, Lone Tree, Solon, Swisher, Tiffin, and University Heights.
Funding What Matters
New LOST funding is projected to generate roughly $22 million annually countywide to support critical community priorities. One of the central goals is to reduce reliance on property taxes while creating additional capacity for strategic investments that benefit residents, employers, and visitors alike.
State law requires that half of local option sales tax revenue must go toward property tax relief. The city councils of Iowa City, Coralville and North LIberty, 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.
Communities across the greater Iowa City area increasingly compete for talent, investment, tourism, and entrepreneurship. Greater Iowa City, Inc. is proud to have championed the coalition to pass the LOST in our major metropolitan areas to provide an opportunity to reinvest in the places and systems that support long-term economic resiliency.
As implementation approaches, businesses are encouraged to review city guidance early and work with their accounting or software providers to avoid last-minute disruptions.
For official tax guidance and statewide LOST information, businesses can also visit the Iowa Department of Revenue LOST Information Page.
