Colome adds municipal tax
COLOME -- The city of Colome will add a 1 percent gross municipal sales tax in 2015 to help the small Tripp County town develop much-needed housing. The Colome City Council approved an ordinance in September to collect a 1 percent tax on municipa...
COLOME - The city of Colome will add a 1 percent gross municipal sales tax in 2015 to help the small Tripp County town develop much-needed housing.
The Colome City Council approved an ordinance in September to collect a 1 percent tax on municipal gross receipts collected primarily from Colome's restaurants, bars and lodging locations, including hunting lodges, City Finance Officer Carol Moyer said. The tax will pertain to businesses that already are subject to sales tax.
"They've pledged it to go toward housing development," Moyer said, of the Colome City Council. "We have a big need for housing here, and this is a way to get some funding going to help our housing problem."
Moyer said the money collected will then be donated to the Colome Development Corporation, which will work on developing new housing. Colome does not have estimates regarding how much the tax will generate for the city.
"We're kind of in the dark about how exactly things are going to go, but our development leaders sort of pushed us in this direction to be able to help solve the housing issues," Moyer said.
Brian London, who is the president of the Colome Development Corporation, said the city is hoping to create a revolving loan fund that could be used for two purposes. One is to potentially purchase homes through the state Governor's House program for new single-family homes. The other option would be raze unlivable structures and make lots available for potential residents.
"Both are viable options for our community and would give us something to work with and develop," he said.
London said Colome officials should have a better idea within a few years of how much money they'll have to work with, and what they want to put toward housing and economic development.
"Our goal is start things out and see where they go with the revolving loan fund and then make it into a long-term, sustainable program," he said.
According to U.S. Census Bureau data, the city is dealing with aging houses. Colome has 186 housing units and 135 of the units -- or 73 percent -- are estimated to have been built before 1970.
London, who is also a real estate agent, said in some instances interested homebuyers can't afford to purchase existing homes because there will be high costs to fix them and make them livable. Those costs could make it difficult for those people to qualify for federal or state homebuying assistance. He said the community has one home on the market and it's one that's been listed for months.
"It's been a slow process but this is a start," he said.
The law goes into effect on Jan. 1, and Colome joins both Hurley and Miller as two other South Dakota towns adding similar 1 percent taxes to their city ordinances for the new year. Lennox and Lemmon imposed 1 percent taxes as of July 1.