Iowa House introduces proposal to allow local option sales tax

April 30, 2015

A Ways and Means subcommittee met Thursday to discuss House Study Bill 250. HSB 250 changes the way metropolitan areas vote on a local option sales tax. Currently a community must receive approval from contiguous counties. Under the new law, a city may implement a local option sales tax without full county approval. Additionally, the new law requires local option sales tax to be 1 percent - it cannot be a fraction of a percentage. One interesting addition to the proposal is a requirement that 50 percent of the revenue brought in by local communities be used for property tax reduction. Proponents of the legislation included the cities of West Des Moines and Waukee, the Metro Coalition and the Greater Des Moines Partnership. ABI opposes any expansion of local option taxes and fees. Groups joining ABI in speaking against the proposal included Iowa Association of Realtors, Iowa Retail Federation, Iowans for Tax Relief and the League of Cities.