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City sales tax collection up — again

By Staff | Dec 24, 2009

It keeps going up – and up.

Rugby’s city sales tax collection, that is.

The city took in nearly $300,000 this past year which is about an 11 percent increase over 2008, according to statistics released by Karla Harmel, city auditor-administrator.

The estimated $295,735.95 collection was buoyed by a one percent increase in the local sales tax which took effect in October. Just how much more that additional one percent added to the collection over the past three months of the year won’t be known until the state tax department releases sales tax figures for the fourth quarter.

One thing that is known, the city’s sales tax has been growing by leaps and bounds.

Consider this:

-The sales tax collection in 2005 was $233,000 and four years later it has increased by $62,000.

-Since 2005, the sales tax numbers have increased every year.

-The 11 percent increase over 2008 signifies the largest one-year jump since 2004.

The sales tax funds the Rugby Area Job Development Authority (JDA) as well as provides the city with dollars to complete infrastructure projects and maintenance.

The JDA receives 75 percent of every dollar collected while the remaining 25 percent goes to the city for infrastructure maintenance costs.

However, that funding formula will be changing next year with the city receiving 65 percent of every dollar collected while the remaining 35 percent funds the JDA.

The city council has indicated a good amount of that infrastructure collection will go toward paying down the 2009 city street improvement project.

It’s estimated the city’s share of the sales tax is $85,039 while the remaining $210,696.34 will go to the JDA.

The city sales tax took effect in 1993 following a vote. It was established to fund future ecoestablished to fund future economic development efforts and was permitted because the city adopted a Home Rule Charter. In addition to the one percent sales tax, there is also a food and motel lodging and occupancy tax assessment. Those funds go toward the operation of the Greater Rugby Conventions and Visitors Bureau.

According to 2009 figures, the hotel-motel revenue was $23,027.71 – a 61 percent increase, or $8,683.29 from a year ago.

The Restaurant/Lodging tax for 2009 also showed an increase. The figure was $46,856.97 which was up $9,242.49 from 2008.

The big jump in those figures was due in part to the construction activity in the area this year, including the wind farm north of town and street and highway improvement projects.

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