OREGON – Shoppers may have noticed a small increase on their sales slips this week, after a 1 percent citywide sales tax on certain items took effect Monday.
The increase amounts to 1 cent for each dollar spent.
Voters approved the sales tax in November; money raised will be used to pay for public infrastructure or property tax relief.
City Finance Commissioner Ken Williams estimated that the sales tax hike will bring about $240,000 a year, which will help pay for the $15.8 million worth of projects outlined in the city’s Capital Improvement Plan.
“The revenue from the sales tax can only be used for capital improvements, such as road or sidewalk resurfacing. It can’t be used for salaries,” Williams said.
“The benefit to residents is that they will get $1 worth of road repairs for every 50 cents they spend. That’s because half the people who shop here live outside of the city. I think that’s a big bang for the buck for citizens of Oregon.”
Had the city opted to raise the same amount through a real estate tax hike, it would have cost the owner of a $150,000 home $238 more a year, Williams said.
The tax does not apply to vehicles or anything with a title, groceries, or prescription and over-the-counter medications.