Mitchell sales tax drop felt in April and May

Amid COVID-19, city had 9.6% decrease over same period a year ago

Mitchell City Hall 5.jpg
The front entrance of Mitchell City Hall at 612 N. Main St. (Matt Gade / Republic file photo)

With 2021 budget hearings fast approaching, the Mitchell City Council received an update of the projected sales tax figures that are becoming more clear for the months of April and May.

According to City Administrator Stephanie Ellwein, the city experienced a 9.59% decrease in actual sales reported in May compared to the same time frame in the previous year. The discussion was held during the council's regular meeting on Monday night at City Hall.

Considering COVID-19 prompted the city shutdown for nearly the entire month of April, the council was anxiously awaiting to see the sales tax figures for March and April, expecting a significant decrease.

“The report is based on revenue or tax receipts that were submitted for April 20 through May 20, which is when we received it from the state, so it’s likely a one-month delay,” Ellwein said. “The numbers represent sales from at least a month ago.”

Mitchell’s restaurants, bars and gyms were mostly closed for a span of 25 days in April, ending April 28.


According to Ellwein, 73% of the city’s tax revenue comes from sales tax, which helps fund city services and operational costs for divisions of the city such as the Department of Public Safety, the James Valley Community Center and the public library, to name a few.

For the first- and second-penny taxes, Ellwein said the city is showing a 0.19% decrease compared to the previous year. In addition, the city’s third-penny sales tax is down 6.29%. Ellwein emphasized the figures regarding the penny taxes consists of actual collections for the city, which are sent by the state of South Dakota, noting the figures represent sales tax for the months of March and some of April.

“We’re about flat for the first- and second-penny tax, and that is likely for sales that occurred a month and a half prior to when we received them,” Ellwein said.

The city collects a 2% sales tax on most purchases, and that is where the first- and second-penny references apply. In addition, the city collects a third of the percentage with the third-penny tax that is added for the city's entertainment sales tax, which applies to prepared food, alcoholic drinks, ticket sales and lodging and is commonly referred to as the "bed, board and booze" tax.

While the city of Mitchell is experiencing a dent in reported sales, Ellwein said smaller surrounding area towns are experiencing an increase. According to Ellwein, Woonsocket, Parkston and Plankinton were experiencing an in was up

“Whether it be that more people are shopping locally and doing more online that goes back to their locality, the smaller towns are seeing an increase in reported sales,” Ellwein said.

Consent agenda

The following items were considered as part of the consent agenda:

  • Approved the minutes of the June 1 and 8 18 meetings, and the May 26 Planning and Zoning Commission meeting.

  • Approved department reports.

  • Approved the following raffle permit: Mitchell Ducks Unlimited with the raffle to be held on June 25.

  • Appointed the following individuals to the respective city boards: Diane Goldhammer to the Library Board for a term to run through June 2022; Emma DeVos to the Library Board for a term to run through June 2022; Pat Skinner to the Parks and Recreation board for a term to run from through June 2022; Brad Penney to Planning and Zoning Board for a term to run from through June 2025; Jeff McEntee to the Golf Board for a term to run from through June 2023: Tom Young to the Golf Board for a term to run from through June 2023.

  • Set the date for the following bid opening: July 1, for Department of Public Safety building tuckpointing project No. 2020-35.

  • Approved change order No. 2 for sidewalk schedule “B” project No. 2019 4B to Rexwinkel Construction.

  • Approved request to accept CARES Act funds for the Palace transit.

  • Approved request to accept coronavirus grant funds from the U.S. Department of Justice.

  • Approved fireworks permit request for Fourth of July from Mitchell Exchange Club.

  • Approved road closure request for James Valley Cycle Club’s March of Dimes Poker Run slated for July 18.

  • Approved road closure request for Outkast Car Club Show on Sept. 19, the closure of Main Street from Railroad to Seventh Avenue for a parade.

  • Approved May 27 and June 15 gas and fuel quotations.

  • Approved June 15 pay estimates.

  • Approved bills, payroll, salary adjustments and new employee hires and authorize payment of recurring and other expenses in advance as approved by the finance officer.

Other business

  • Recited the Pledge of Allegiance, received invocation from First United Methodist Church and heard citizens' input.

  • Approved consent agenda.

  • Held hearings as Board of Adjustment.

  • Application withdrawn for Henry and Patricia Flack’s application for a conditional use permit to construct a storage building on a non-contiguous lot, which comes with the request for an oversize variance of 3,200 square feet vs 2,000 square feet and a height variance of 24 feet vs. 22 feet as required, located on Barington Court, legally described as lot 12 within lot 12 of Fiala's Addition, in the East half of the northwest quarter, Section 4, township 103 north, range 60 west of the fifth prime meridian, in the city of Mitchell. The property is zoned RL Residential Lake District.

  • Approved Resolution No. 2020-39, a plat of lots 12G-1 and 12J-1, within lot 12 of Fiala’s Addition in the east half of the northwest quarter of Section 4, Township 103 north, Range 60 west in the city of Mitchell.

  • Approved Mitchell United Way’s request for a permit to hold a parade on July 18 to show tribute for essential workers.

  • Held discussion regarding the city of Mitchell’s building codes for houses.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
What To Read Next
Get Local