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Detroit Lakes contemplates local sales tax, food/beverage tax

The City of Detroit Lakes is moving ahead on establishing a food/beverage/entertainment tax, and preparing to ask for a local option sales tax when the state lifts the moratorium at the end of 2010.

The City of Detroit Lakes is moving ahead on establishing a food/beverage/entertainment tax, and preparing to ask for a local option sales tax when the state lifts the moratorium at the end of 2010.

City aldermen, staff and the mayor met Tuesday afternoon to discuss some of the 2010 and 2011 projects in the city and to discuss potential revenue sources. With the threat of losing $334,000 in local government aid this year, the city is looking to find other revenue sources than raising property taxes.

Although there was no official action taken Tuesday, all those present agreed to move forward.

"We're not going to get any more money from St. Paul," Alderman GL Tucker said. "We've got to take care of ourselves."

Mayor Matt Brenk said he'd like to see the taxes in place because there are lots of people coming into the city to use its resources, and this would be a way to collect from all, rather than just the residents.

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"It's not fair to put all this burden on the local taxpayers," he said.

A half cent food/beverage/entertainment tax would generate about $110,000 annually, City Finance Officer Lou Guzek said. The city would purchase bonds in whatever amount and the annual funds would go to pay off the bonds.

With a sales tax or food and beverage tax, there needs to be something specific the money is planned for. Although that's not decided at this point, one major thing brought up was to control the flowering rush on the lakes.

Long Bridge Grill and Bar owner Brian Johnson said he wasn't in favor of the food and beverage tax because it's a "value added tax," meaning the bars would eat the tax because they wouldn't charge a customer $4.33 instead of an even $4 for a beer. Also, establishments were just hit at the first of the year with a doubled liquor license fee, he added.

Related Topics: DETROIT LAKES
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