Patrons at the handful of Trent businesses will pay an additional penny on each dollar in sales tax next July.
The change, voted in unanimously by the city council in November, changes the sales tax to 6.5 percent, on par with most towns in the state. South Dakota has businesses collect 4.5 percent in retail sales tax, and each community has the option of collecting up to 2 percent
“We’ve always been 1 percent since 1998 when they started it,” said Kim Nelson, city finance officer.
Trent is one of 30 municipalities in the state that still collects 1 percent. Bruce and McLaughlin are scheduled to change from 1 percent to 2 percent on Jan. 1, according to the state Department of Revenue. Cities can change the rate only on Jan. 1 or July 1 each year.
Trent council members started talking about the change in July after looking at the city budget, Nelson said.
“(The) Council discussed it and thought it would be a good idea because our reserve is going down,” she said. “We want to make sure we have a comfortable reserve in case we have an emergency.”
The change could have taken place Jan. 1, but the state Department of Revenue needs time to notify businesses so the tax money can be accurately collected and paid to the state, she said.
The additional money will go into Trent’s general fund, Nelson said.
Trent, with a population of 238, has five businesses, she said. In addition, some revenue is generated when auctions are held at the Trent Gym.
The town has an annual budget of about $100,000.