Definition:

Local option sales taxes (commonly referred to as LOST) are sales taxes imposed by localities (cities or counties) in addition to a state's overall sales tax rate. A local option tax is usually voted in a public election and serves a specific local purpose.

Because some states have many local option taxes, it is difficult for merchants to determine taxes on products sold to individuals in different localities.

For example, Iowa has 99 counties and each county has several local option tax rates, in addition to the overall state sales tax rate. The Sales Tax Clearinghouse has a search page where you can enter the zip code of the customer and see the current sales tax and local option tax rate for that area.

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Examples: Some Iowa counties, hit by flooding in summer 2008, imposed local option taxes for flood recovery projects.