Both the City of Iola and Allen County received a nice little Easter egg recently, presumably at the hands of major construction projects.
For the month of February, Iola garnered $76,274 from its compensating use tax, and Allen County received $140,397.23. The compensation tax is sent from the state in regard to purchases made outside of the county that are meant to be used in the county.
For example, construction supplies for major projects like the U.S. 54 construction and the Enbridge pipeline have a sales tax placed on them. If the tax from the county of purchase is lower than that of Allen County, the difference is compensated by the buyer.
“It was a significant help to the city,” Clerk Roxanne Hutton said of the increase.
In 2013, Iola received $32,183 for the entire year. For the first two months of 2014, it received $76,274.
While the funds are appreciated, Iola Administrator Carl Slaugh said, they are a “one-time deal” presumably. Both the county and Iola distribute the money into the general fund for miscellaneous projects. Hutton said the city generally uses the funds for road projects.
“You never know if you are going to get it (the increase) or not,” Slaugh said. “It’s a nice windfall when those projects come up.”
He said Merriam has one of the largest draws in the state for compensation taxes because of its numerous high-end car dealerships. As for Allen County, major-purchase businesses are temporary — such as road construction and pipelines.
Nevertheless, every penny helps.
Tax compensation rises
