A new law tucked into the state’s package of budget bills is going to take tax money away from local communities that they have come to rely on. The state is now charging a two percent fee to collect local sales tax. State wide sales tax is six and half percent; on top of that cities are able to place their own sales taxes. Now the state is going to charge local governments two percent of that total as a collection fee. Bill McCarty says in all the state is expected to keep close to $60 million but he doubts that it’s only to cover state expenses.
McCarty says the fee has never been collected before and its impact will be compounded by another change. The state is going to hold ten percent of all municipalities’ local government distributive funds. But the state says that will only happen for 1 year.