Des Moines Brings In $38 Million In First Year Of Local Option Sales Tax

DES MOINES, Iowa - The City of Des Moines says it's taken in $38 million ($38,121,713) in the first year of its Local Option Sales Tax.

The tax went into effect in July of last year after voters approved it in March in 2019.

The city says collection of the tax outstripped projections by $1 million.

Half of the revenue it provides is used to reduce property taxes, while much the rest is split between street, neighborhood and public safety improvements, and expansion of library hours. Designated Reserves and Financial Reserves account for 22 percent on use from the tax.

The Local Option Sales Tax is a local increase of the statewide sales tax from 6 percent to 7 percent on each dollar spent.

“Through Local Option, voters put in motion a catalyst that will lead to decades of positive change and measurable difference for our neighborhoods and residents,” said Mayor Frank Cownie in a statement Wednesday. “As a City, we had an obligation and commitment to identify projects, services and initiatives that benefit residents, businesses and community organizations – while exhibiting financial responsibility and transparency."

By law, the Local Option Sales Tax must provide property tax relief in the form of a 60-cent levy rate reduction.


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