First local option sales tax check arrives

Published 12:00 am Sunday, June 11, 2006

By Joseph Marks, staff writer

We voted on it. We paid it. And now the money’s coming in.

The city of Albert Lea received a $50,000 check Thursday from the state of Minnesota, the first monthly refund from the city’s local-option half-cent sales tax.

The local sales tax was passed by referendum last November and went into effect April 1. All funds received from the sales tax will go to water improvement projects in the Shell Rock River Watershed District. The revenue from the sales tax goes to the city and the district.

&8220;We’re obviously happy that we got the referendum passed and got a secure source of funding,&8221; Watershed Outreach Director Cathy Rofshus said.

The first sales tax funds will be used for sediment probing in Albert Lea and Fountain lakes and Lake Chapeau and analysis of sediment collected from Bancroft Bay in Fountain Lake, Rofshus said. She said the sediment work is already in progress but the engineering company agreed to delay payment until sales tax funds were available.

City officials were surprised by the $50,000 check, which they had expected to be closer to $90,000.

City Finance Director Rhonda Krcil said state officials told her one reason the number came in low is because some businesses pay sales tax to the state on a quarterly basis and so won’t be

turning in money collected for the local option sales tax until July.

The current check represents sales tax collected by businesses between April 1 and May 1.

Krcil said other businesses may not be collecting the additional sales tax because they aren’t aware they have to.

All businesses that charge state sales tax should be charging the local sales tax as well. Krcil said the state sent a notice to all registered sales taxpayers before April 1 when the local tax went into effect.

Krcil said a one-time start-up fee the state collects has not been charged yet. She said the fee ranges from $3,000 to $15,000 depending on the size of the area collecting sales tax.

(Contact Joseph Marks at joseph.marks@albertleatribune.com or at 379-3435.)