New sales tax takes effect July 1

Local business owners are preparing for a sales tax increase, accepted in exchange for improved roads.

Residents voted to pass a city wide sales tax increase last November. The increase will raise the local sales tax from 1.5 percent to two percent. This will increase the overall sales tax, combined with a state rate of 5.5 percent, to 7.5 percent.

The tax hike is set to take effect July 1.

Half of the funds collected from this increase will go toward street repair and construction. The remainder will be split among various projects, including the new swimming pool and irrigation on the golf course.

Most localities in Nebraska have a local sales tax of one to 1.5 percent, according to the Nebraska Department of Revenue.

Sidney's is now one of the highest sales taxes in the state. Yet many business owners think that the tax will be put to good use.

"I think the streets need some help," said Larry Fraas, owner of Larry's Clothing.

It's better to spread around the taxes, as not to overburden Sidney homeowners, he added. Since this is a sales tax increase, residents as well as tourists, truck drivers and visitors to Cabela's will pay the bill.

"It's good to spread the pain," he said.

Fraas doesn't believe that the tax will have much effect on sales—"That might be wishful thinking, though," he continued.

Other business owners know that they'll just have to deal with the increase.

"There isn't much we can do about it," said Kathy Assad, owner of Accents Home and Yard Decor.

Assad agreed with Fraas that the funds are going to good use.

"We do need it for the streets," she said.

She hopes that it won't affect sales, but she doesn't know for certain if it will or not.

On the other hand, Steve Blume, owner of New to You, doesn't think the tax hike will cause any problems.

"I can't imagine that it'll affect sales," he said.

His biggest concern regarding the increase is remembering how to change the sales tax amount on his cash register.

"I'm in favor of the projects it's supposed to support," he said.

The Sidney chamber of commerce has not taken an official stance on the sales tax increase.

Platte Center, in central Nebraska will also increase its local sales tax on July 1.