Where do your city taxes go?

Belle Fourche Finance Officer Breanna Schaefer spoke to community members about what their taxes fund during Wednesday’s Belle Fourche Area Chamber of Commerce luncheon. Pioneer photo by Lacey Peterson

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BELLE FOURCHE –– People commonly wonder what their tax dollars fund within the city and on Wednesday, that is precisely what Belle Fourche Finance Officer Breanna Schaefer spoke about during the Belle Fourche Area Chamber of Commerce luncheon.

Schaefer got right down to the nitty-gritty, talking about the 6.5% sales tax tacked onto purchases made, explaining that taxes paid in town are split in two ways.

“The state is going to take the lion’s share … 4.5%, and then the city of Belle Fourche gets 2%,” she said. 

The city takes its 2% share and divides it in half, Shaefer said, putting 1% toward the first penny fund, commonly referred to as the general fund.

“And this is where we pay for your services,” she said.

Emergency medical services, 911 funding, library, park maintenance, snow plowing, and museum funding are among the services funded in part by the first penny sales tax collected.

The second penny fund, also known as the capital improvement project fund finances the town’s infrastructure such as government buildings, roads, utility infrastructure, to name a few.

Although the state general sales tax rate is 4.5%, cities and municipalities of South Dakota are allowed to collect their own rate that can go up an additional 2% in city sales tax.

This is where the third penny fund, or gross receipts, comes into play, Schaefer said.

This type of sales tax is an extra 1% taxed on lodging, eating establishments, alcohol, and many types of amusement and entertainment. It is also known as the bed, board, and booze tax.

The city utilizes third penny taxes to fund improvements on promotional areas of the city.

“So like our (Black Hills) Roundup Complex, that’s what third penny is for – soccer, baseball, anything at this Roundup Complex to bring people in (to town),” Schaefer said. 

This fund, however, is significantly smaller fund because the tax base is relatively small, she said, as only specific purchases qualify for this additional tax.

Next, Schaefer spoke about the often-confusing situation where a person may go to the museum or another tourism-related business and pay more than the 6.5% tax rate. The tourism tax also funds the first penny. 

“(Tax dollars) positively fund a lot of the things that go on in the city,” she said.

The municipal airport north of Belle Fourche is one such example. 

“Your tax dollars are going directly to the airport,” Schaefer said. 

In addition to that, the first penny funds the cemetery, elections, pest and weed control, animal control, flood prevention, and much more.

“There are things that we (the city) do that people don’t see,” Schaefer said. “For instance, we just took out a couple of real big cottonwood trees from one of the creeks so that your houses didn’t get flooded. These are the things that nobody knows that you’re paying for but you are paying for these services.”

The chamber hosted the luncheon at Venue 519 on the corner of Grant Street and Fifth Avenue.

Mark Rambow, the newly hired executive director of the Belle Fourche Area Chamber of Commerce told the group that the organization has found a new home – 509 Grant St. which previously housed Rustic Soul. He said the chamber is hoping to be moved into the new space by next week.

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