Malt beverage tax benefits city with Prentis Park improvements
The City of Vermillion has used the markup of the sale of malt beverages to fund various recreation improvements in Prentis Park.
In South Dakota, cities are allowed to markup the sale of malt beverages by a total of 5 percent. Vermillion implemented this new markup July 1, 2015.
In 2015, the city brought in $64,188.47, and has increased every year since. As of August 2018, there has been an income of $86,987.40.
John Prescott, city manager and a member of Vermillion city council, said the different park and recreation improvements were mainly focused on the Prentis Park and the Prentis Plunge.
“We also have the parking lot that was completed earlier this year, the basketball courts, and we’ve also made small improvements to the disc golf course that was recently completed and redone… we got a grant to improve the horseshoe pits that are there,” Prescott said. “There will be permanent boards that will be there so if people want to play cornhole they just need to bring the bags with them. We’re also adding an additional trail through there.”
Prescott said the council has goals for this extra revenue brought in every year.
“When we were crafting that ordinance and having conversations with the malt beverage license holders, we talked about two things. One is where the money went, and so it’s written in the ordinance its used for parks and recreation improvements and also reporting back to the community annually where that money goes,” Prescott said.
The process to get the revenue from the varying establishments happens once a month.
Gregg Peterson, the manager of the Vermillion Liquor Store, explained the process of how the markup affects the local businesses in town. Even though they’re owned by the city, the processes and obligations still apply to them when it comes to the markup.
“We actually, as far as the consumer goes, don’t think its been a big impact. Because a lot of the restaurants and bar owners and ourselves included have had to eat a lot of that tax to remain competitive, I don’t think its been passed onto the consumers like people thought it would when it was put in place,” Peterson said.
Peterson said the school year and football games help bring in this revenue.
“USD has a big impact on the sale of alcoholic malt beverages,” Peterson said.
Despite the markup, Peterson said he has not seen a difference in the sales of malt beverages; with October being the busiest time of the year.
“October’s our busiest month, and June’s usually our slowest. Because of D-Days, and there’s more home football games,” Peterson said.
Pedro Chequetti, a senior operation analytics and mathematical studies major, said he enjoys the improvements the city made to the pool.
“I really like the pool, I like to swim, and it’s something to do during the summer,” Chequetti said.
