Entertainment Tax and where it goes

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As we told you last night, the city of Sioux Falls will dedicate $1.5 million from the entertainment tax to help speed up the renovation of the State Theater in downtown.

Since that announcement, a lot of you have had questions about the entertainment tax. How is the money generated? How much does it generate each year and what else is that money used for?

Here’s a brief explanation.

The city’s entertainment tax is a third penny sales tax that was approved by the city council in December of 1991 and took effect that following March to help fund the Washington Pavilion.

In the past four years, it’s generated between $7 and $8 million each year in extra sales tax collections at hotels, restaurants and bars.

The city finance department says that money then gets earmarked for other special projects in the field of entertainment, like the Washington Pavilion, Orpheum Theater, and the Sioux Falls Convention Center and Arena.

It also pays for upkeep of the PREMIER Center, but the city finance department says the PREMIER Center has been pretty self-sufficient lately, generating enough money on its own to pay for some of its own renovations.

With the entertainment tax and another large donation from T. Denny Sanford, city officials expect movies will be playing again for the public in the Spring of 2020; less than one year from now.

The city says the $1.5 million it’s giving to fund the State Theater, is a one-time expenditure for exterior improvements and some interior health and safety improvements.

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