Effective July 1, 2008, the state sales and use tax rate will increase from 5% to 6%, and the School Local Option Sales Tax (SILO) will cease to exist as a separate tax. These changes will be represented on the July-September quarterly tax return due in October. The additional 1% replaces SILO, and will continue to be apportioned to school districts and used for property tax relief. Because of this, businesses will continue to report sales by county to provide for correct distribution to school districts. The state rate for hotel and motel lodging, certain construction equipment, and the short-term auto rental tax will remain at 5%. (Notice, Iowa Department of Revenue, June10, 2008)