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Sales tax revenue up throughout Black Hills

RAPID CITY (AP) -- Sales tax revenue figures indicate business is booming in Rapid City and communities across western South Dakota's Black Hills. Energy activity in neighboring North Dakota is one likely reason.

Rapid City saw a $7 million increase in municipal tax revenue collections from 2010 to 2012, to $52.6 million. The cities of Deadwood, Sturgis and Spearfish also have seen steady climbs, the Rapid City Journal reported. Local tax revenues come from city sales and use taxes, as well as taxes on hotel stays.

Officials cite several local factors for the increases, including a healthy housing market, strong tourism spending and new industries. Some also credit the oil boom in western North Dakota.

In the western South Dakota city of Belle Fourche, where a lot of North Dakota oil workers live and commute, sales tax collections jumped nearly 9 percent from 2011 to 2012, according to the South Dakota Retailers Association. Figures from the first quarter of this year also show increases, with January up 11.3 percent over 2012, February up 29.2 percent and March up 4.2 percent over the prior year.

"I don't think that's anything to sneeze at," said Belle Fourche Chamber of Commerce Executive Director Teresa Schanzenbach.

Rapid City, the largest city in the region, saw a 2.8 percent gain in tax revenues in 2010, a 5.1 percent jump in 2011 and a 6.7 percent increase last year, according to the South Dakota Department of Revenue.

Expanding tax revenues are just one marker pointing to a bolstered regional economy, according to Rapid City Economic Development President Ben Snow.

Housing also has thrived in the city, he said. In the first three months of the year, Rapid City issued 333 housing permits totaling about $31.4 million in construction. The city issued 405 permits in all of 2012.

"The energy sector has been a clear winner for us," Snow said. "We are perfectly positioned to service three major energy basins."

Those basins include the Williston Basin to the north; the Powder Basin to the west; and the Denver Basin in Colorado. Rapid City serves as a hub of employment, services and transportation for all three, Snow said.