On the Ballot November 4
A local sales and services tax shall be imposed in the City of North Liberty, Iowa at the rate of one percent (1 %) to be effective starting July 1, 2026.
Revenues from the sales and services tax shall be allocated and expended as follows:
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50% for Property Tax Relief; and
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50% for capital projects, including but not limited to, fire stations, community center upgrades, parks, trails, and other projects identified in the City’s Capital Improvements Plan; and for programs and initiatives that increase affordable housing supply and support neighborhood reinvestment projects, home improvement/renovation grants, rental rehabilitation, and other housing projects designated by City Council.
What is a
Local Option Sales Tax
(LOST)?
Often shortened as "LOST" or called a "penny tax," a local option sales tax is simply an extra 1% sales tax added to some purchases. Just like sales tax, purchases of unprepared food for human consumption (groceries), gasoline, and utilities will not include the local option sales tax. 50% of the tax received will be for property tax relief.
North Liberty is Worth Every Penny
State law requires that half of local option sales tax revenue must go toward property tax relief. Guided by community feedback and the City’s strategic plan, the North Liberty City Council has chosen the following priorities for the remaining revenue:
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Capital projects, including a new fire station, upgrades to the Community Center, parks and trails
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Affordable housing
North Liberty Fire Station
North Liberty's fire station is outdated and cannot adequately serve all residents. The current fire station cannot fit modern aerial fire trucks or larger rescue vehicles, making it challenging for the department to have the necessary equipment to respond to fires in buildings taller than three stories. The current station also poses space and safety concerns for the firefighters who work there. The station was not built for 24/7 occupancy and lacks basic safety equipment – it doesn’t even have a sprinkler system. Insufficient storage leads to fire gear being stored on the floor or in offices. There isn't a dedicated training room, and the small water line makes it time-consuming to refill water tanks in the trucks.
North Liberty needs public safety facilities that meet the demands of our rapidly growing city. Local option sales tax revenue can help the city build a fire station that keeps residents safe now and in the future.
Affordable Housing
One-third of households in Johnson County spend more than 30% of their income on housing-related expenses, leaving them limited resources for other essential needs. People's access to housing is the foundation of opportunity in all other aspects of their lives with implications for their health, employment, and education.
Stable, affordable homes strengthen North Liberty for everyone—workers, families, seniors, and local businesses alike. A local option sales tax will provide a new funding source that allows the City to address our community’s housing needs.
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Property Tax Relief
Since 2019, state law requires any city that passes a local option sales tax to designate 50% of the revenue for property tax relief. In North Liberty, this property tax relief will be achieved by directly reducing property tax rates and/or preventing increases to property tax rates that would otherwise be necessary to help fund critical infrastructure and public services. City Council will determine how property tax relief is provided each year during the City’s annual budget process.
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Vote Yes on November 4
These are already identified needs – not items on a wish list. Visitors are already spending millions of dollars in North Liberty every year, and we can use the new revenue from local option sales tax to fund these important projects that directly benefit our community.
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Vote Yes for local option sales tax on November 4.
North Liberty FAQs:
What is a local option sales tax (LOST)?
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LOST is a 1-cent local option sales tax. If its adoption is approved by a majority of voters in the Nov. 4, 2025, election, it would raise the total sales tax from 6 to 7 percent, as it is in 93 percent of Iowa communities.
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Who pays the tax?
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Anyone who shops in a community that has adopted LOST pays the tax, including visitors and people making online purchases delivered there.
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In Johnson County, this includes the millions of visitors who spent more than $450 million locally in 2023, which would help fund local services if a LOST is adopted. North Liberty residents already pay the additional 1 percent when shopping in the 93 percent of other Iowa communities that have adopted LOST, including Des Moines, Cedar Rapids, Davenport, Sioux City, Waterloo, Council Bluffs, Dubuque and Ames.
​Why is LOST being considered now?
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North Liberty, like many cities across Iowa, is looking for revenue to support facilities and services following state property tax changes passed in 2013 and 2023. These changes reduced the city’s ability to pay for services – such as fire response – as our city grows. Funding important projects like a fire station and service to meet our evolving needs with this revenue stream, rather than relying solely on property taxes, allows North Liberty to continue to support popular community programs and services while avoiding potential increases to the property tax rate.
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What purchases are and are not impacted by LOST?
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LOST applies to most taxable goods and services. However, many basic necessities are not subject to sales tax in Iowa. These also will not be taxed under LOST:
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Groceries
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Prescription drugs and health products
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Diapers and feminine hygiene products
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Rent, mortgage payments, and utilities
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Vehicles and gasoline
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Purchases made during the annual Sales Tax Holiday
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For a complete list of taxable and non-taxable purchases, visit the Iowa Department of Revenue’s Sales & Use Tax Guide.
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By exempting food and other necessities, sales taxes have been shown to have less impact on vulnerable households.
How are property taxes impacted by LOST?
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By law, 50 percent of LOST revenue must be used for property-tax relief. The revenue will be used to lower the tax levy and offset future increases. Without this backing, a new fire station to support our community’s evolving needs will require an increase in the property tax levy of an estimated $1.16 per $1,000 of assessed value.
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How much revenue for local projects is LOST projected to generate?
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Since it is a sales tax, it depends on which municipalities approve it. If majorities of Iowa City, Coralville and North Liberty voters each approve the measures, the total annual revenue is expected to be $22 million; North Liberty’s portion is estimated to be about $2.81 million per year in that scenario.
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How will the revenue from LOST be used?
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As required by law, 50 percent of LOST revenue must be used for property-tax relief, while the other half must be used as expressed in the ballot language approved by the city’s voters.
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After the half required for property tax relief, the City of North Liberty will use the remaining funds to support capital projects identified in the Capital Improvements Plan, including building and modernizing our fire station, upgrading emergency equipment (including a new ladder fire truck), Community Center upgrades, infrastructure improvements, and acquiring and developing parks (such as the 40 acres located north of Penn Street and east of Jones Boulevard) and trails. The funding will also be used for initiatives that increase the affordable housing supply and support neighborhood reinvestment projects.
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Who decides how to spend the revenue?
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Each year, the City Council approves a budget and a Capital Improvements Plan, which would determine the specific expenditures annually.
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How long would LOST last if passed?
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The ballot measure does not provide for a sunset.
When will the tax be collected?
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If approved, collection of the one-cent tax will begin July 1, 2026.
How, when, and where do I vote on LOST?
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The measure will be on the November 4, 2025, City and School Election ballot, and voters can vote early, request a ballot by mail or on election day at their regular polling place.
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What about Iowa City and Coralville?
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Voters in Iowa City and Coralville will also have the opportunity to approve a local option sales tax on November 4. Each city has unique ballot language and would use tax revenues differently based on their priorities. Each city’s voters will determine whether the tax is collected in their community.
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