2004 brings changes to city sales tax

2004 brings changes to city sales tax by David Lias The new year will bring several changes to the city sales tax collected in Vermillion and other municipalities in South Dakota.

However, none of the regulations impact the tax rate, codes, or application of tribal taxes, the telecommunications tax, the tourism tax or motor vehicle tax.

Sales tax changes include:


* Food is now taxable in every city. This impacts those selling food in Rapid City, Spearfish, Pierre, Mitchell, New Underwood and Wentworth.


* Food is taxable at the same rate as every other product. This impacts those selling food in cities that previously taxed food at 1 percent and all other products at 2 percent.


* Some cities have changed their sales tax rate. There are 205 cities, including Vermillion, with a sales tax. The tax rate for 183 cities is either 1 percent or 2 percent. Twenty-two cities have a sales tax rate somewhere between 1 percent and 2 percent.


* Every city repealed the exemption for construction material delivered to a truck of a construction company for use outside city limits.

Effective Jan. 1, Vermillion's general municipal sales tax rate is 2 percent. All city tax codes will change because of the change in where the tax collected can be used. Previously, the first and second penny tax could be used in specific areas.

Now, all tax collected is part of general funds.

In addition to the municipal sales tax, Vermillion has a 1 percent gross receipts tax on lodging, eating establishments, alcohol and admissions.

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