In the United States, a local option sales tax (often abbreviated LOST) is a special-purpose tax implemented and levied at the city or county level. A local option sales tax is often used as a means of raising funds for specific local or area projects, such as improving area streets and roads, or refurbishing a community's downtown area.
LOSTs are always appended onto a state's base sales tax rate, most commonly at a rate of 1%. For example, in Iowa, the base sales tax rate is 5% statewide, or five cents per dollar. If a city or county in Iowa were to implement a local option sales tax, this would result in a 6% sales tax rate, or six cents per dollar. Since a LOST is implemented at city or county level, they apply only within the city or county in which it was implemented. Using the Iowa example, this means that any neighboring cities or counties would remain at 5% sales tax, unless they implement their own LOST.
A LOST most often (if not always) requires a passing vote by the general public before they can be implemented. Once implemented, a LOST is often levied for only temporary time periods, such as five years. As the expiration date approaches, another vote may be presented to the public, giving the options of either extending the LOST (for any other projects), or letting the LOST expire and discontinue.
Some states include multiple types of LOSTs depending on their intended purpose. For example, in Iowa, a standard LOST is used for city or county improvement purposes, whereas a SILO (school infrastructure local option) tax is often used to build new schools, improve existing school buildings, or other educational purposes. Since a standard LOST and SILO are considered different types of taxes, regardless of them both being forms of local option sales taxes, it is possible for a city or county to implement both simultaneously (Using the Iowa example, this would yield a 7% sales tax within that city or county).
Famous quotes containing the words local, option, sales and/or tax:
“There is the falsely mystical view of art that assumes a kind of supernatural inspiration, a possession by universal forces unrelated to questions of power and privilege or the artists relation to bread and blood. In this view, the channel of art can only become clogged and misdirected by the artists concern with merely temporary and local disturbances. The song is higher than the struggle.”
—Adrienne Rich (b. 1929)
“A self-respecting nation is ready for anything, including war, except for a renunciation of its option to make war.”
—Simone Weil (19091943)
“There are no galley-slaves in the royal vessel of divine loveevery man works his oar voluntarily!”
—St. Francis De Sales (15671622)
“Change of fashion is the tax levied by the industry of the poor on the vanity of the rich.”
—Sébastien-Roch Nicolas De Chamfort (17411794)