Sales Tax

In 1992 Iowa sales and use tax was increased to five percent to be applied to the sale of all tangible goods, except groceries and prescription drugs. All of the five percent sales tax revenue goes to the State of Iowa General Fund. A comparable use tax should apply to all goods sold in Iowa from outside the state. Effective in 2018 all Internet sales are subject to the five percent statewide sales tax plus the one percent local option sales tax for a total of seven percent use tax.


In 1988 the Legislature decided the schools needed more money, so each County was given the option of voting for an additional one percent sales tax that was to be used for school infrastructure. Originally this school add-on was known as the School Infrastructure Local Option (SILO) sales tax. In 2008 that extra one percent was combined with the original five percent. In the beginning the SILO tax was given to the school districts were the SILO tax was collected. Dickinson County faired very well under that program. Some counties complained they were not receiving their fair share, so the name was changed to Secure An Advanced Vision For Education (SAVE). And the distribution formula was changed to distribute the SAVE revenue evenly among all school districts based on the number of students. The most recent annual distribution was $960 per student. Recently the Iowa legislature extended this school infrastructure sales tax to January 1, 2051.


In the late 1990’s each County and City was given an option to vote for an additional one percent sales tax that became known as the Local Option Sales Tax (LOST). Dickinson County and most cities voted for that also. That money is distributed to the City or County where it is collected. For Fiscal Year 2018 Dickinson County has estimated $1.3M in Local Option Sales Tax that will be allocated 75% to the Rural Fund and 25% to the General Fund. In most of Iowa you are paying a seven percent sales tax that includes a one percent Local Option and one percent School Infrastructure sales tax.


Note: Iowa school funding is a very complex set of formulas and annual appropriations that is beyond the scope of this website.