KELO Exaggerates Difficulty of Implementing Half-Penny Sales Tax Increase

KELO-TV reports that store owners face a “learning curve” in implementing the half-penny increase in the state sales tax coming June 1:

“I don’t know how that’s going to work out, the whole half-cent thing,” Unglued manager Ashley Rieck said.

That’s why Unglued gift shop manager Ashley Rieck will meet with her accountant in North Dakota later this month to sort through South Dakota’s half-cent sales tax hike.

“I think the biggest thing is how do we absorb, or how do we fill in the half-a-cent versus a full cent. But I don’t have an accounting degree, so I’m going to let him figure it out,” Rieck said.

Businesses will also have to make adjustments to their monthly online tax payments to the Department of Revenue.

“I’m sure there will be a little bit of a learning curve as far as paying our sales tax each month. We’ll have to see how that form works out, but I’m sure they’ll have that all worked out by that time,” Great Outdoor Store owner DeAnn Echols said [Perry Groten, “Businesses Face Sales Tax Hike Learning Curve,” KELO-TV, 2016.03.03].

Learning curve? Um, multiply sales by 1.065, then round up, just like you do now when you multiply $5.55 by 1.06 and get $5.883. That doesn’t take an accounting degree; that takes elementary school math.


34 Responses to KELO Exaggerates Difficulty of Implementing Half-Penny Sales Tax Increase

  1. Steve Sibson

    The problem for business owners is the emergency clause which will rush the implementation. And with that clause, we can’t refer it to a vote. The Democrats have accepted tax the needy and give to the greedy by rejecting democracy.

  2. Nick Nemec

    How stupid, and how stupid does KELO think we are? Didn’t people learn decimals back in 3rd or 4th grade?

  3. Richard Schriever

    Seriously – problem? Geez, go log into the “control panel” of your POS machine and change the state tax rate from .04, to .045. Done – and about that quickly. How are we gonna pay it? Read the end-of-month report that tells you how much state sales tax you collected, and write the frikkin’ check. JUST LIKE YOU DO KNOW. Good grief, it’s no wonder so many small businesses don’t last beyond 3 years.

    Nick – as to learning it in 3rd or 4th grade – well – it is SD’s last in the nation education system on display I suppose.

  4. crossgrain

    “I don’t know how that’s going to work out, the whole half-cent thing,” Unglued manager Ashley Rieck said.

    I’m trying to figure out if that’s great writing or lousy writing. Either way, the manager appears to be unglued.

  5. Nick Nemec

    Maybe it’s a subtle jab at the Unglued manager, or is it unglued? Or maybe both. “The unglued Unglued manager.”

  6. Nick Nemec

    Richard, since the manager is (I’m assuming) an adult, the problems with the South Dakota education system go back a long ways. But then we knew that.

  7. I’m sure that the Unglued manager comes unglued every time she buys gasoline. How do those gas stations pull it off?

  8. I understand, if we were still using pencils and paper, that it might slow things down a bit, but this is the age of the ‘puter! Not brain surgery!

  9. I wonder how many folk they needed to interview before they found someone who found it difficult. How did that person handle a leap day?

  10. mike from iowa

    When wingnuts give yoooge taxbreaks to the koch bros,is that called the emergency Santa Clause?

  11. Glad nearby North Dakota is as far as we need to travel for help on this.

  12. Roger Cornelius

    I’m trying to figure out who is dumber, KELO or Sibson.

  13. As a candidate you might want to ease up on this type of post that belittles small business owners.

    I hadn’t read through the SD blog posts today, so wasn’t aware of this post until a customer came in just moments ago and asked if I read what the District 3 Dem Candidate wrote against small business owners (this person is a Democrat btw, not that it matters, he is in Dist 2 anyhow). I am replying to your post on his behalf.

    In this particular case the small business owner has an old cash register and they cannot find the book to it, and the manufacturer of the cash register is long out of business. We will try to find the programming instructions online. But if that isn’t possible they will likely have to buy a new cash register. He is willing to do that, but it is a definite unexpected expense that will hit their already tight profit margin.

    This will negatively impact many small business owners around the state in a similar fashion. No, not most of them, but for many it will be a new hurdle to climb.

    We’ve already gotten calls regarding this and have been asked for help on implementing the change later this year. Some are from people who want help programming their cash register; some are people that have a software-based POS and are unsure of how to change it (many of these programs are not as simple as going to the “control panel” and changing it quickly); some are small businesses that have the maintenance of their POS handled by a third-party remotely over the internet and there will be a fee to make this change.

    There are other situations I haven’t listed, but these are the main ones. These people are not dumb because they can’t make the change on their own. Simply put they are good at what they do, and making changes on a POS (which may predate them owning the business) is simply not in their skill or knowledge set.

    Yes, making a change to 4.5% from 4% should be easy. And for most business owners it will be. But for the ones that will have problems or need help it will cost time and/or money to get past this change. That doesn’t mean they don’t understand elementary math, just that their particular skills/knowledge align with the actual mission of their business, and not with POS programming.

  14. sibby- I see a bumper sticker in your future:

    Democrats … tax the needy and give to the greedy by rejecting democracy.

  15. ken, help pass Medicaid expansion then get back to me.

  16. POS? I thought his was a DOS system.

  17. Donald Pay

    These changes aren’t hard to do, but people freak out because they might have to spend ten minutes and a phone call trying to be reassured that they aren’t going to do something wrong.

    It’s like me setting up my Smart TV a few months ago. I found out the frickin’ TV was smarter than I am. I admit I freaked out, said a few cuss words, called the help number. A nice lady reassured me I was doing it right. Not sure why this sort of typical human bumbling would be newsworthy. News must be slow out there on the prairie.

  18. Steve Sibson

    “I’m trying to figure out who is dumber, KELO or Sibson.”

    So Roger, you have no problem with denying democracy? You have no problem taxing the poor in order to give the wealthy tax breaks? Democrats hate democracy, the poor, and have a hate filled attitude toward those who disagree with them? Do you still want me kicked out of the Madville toilet?

  19. Don Coyote

    @96Tears:
    POS = Point Of Sale – A computer program that tenders sales, monitors inventories, invoices, maintains customer database, etc

    DOS = Disc Operating System A command driven computer operating system(s)

  20. Don Coyote

    @Ken Santema: Excellent points. Also since most POS calculate in binary code, some older systems may not be able to handle the fractional or three decimal places conversion to binary code and back increasing the number of rounding errors which can number in the hundred of thousands even in a smaller business causing reconciliation issues with tax returns calculations which are done in decimal arithmetic.

  21. @ Steven Sibson

    Steve while I don’t like supporting this tax increase, it is the first opportunity that the Republican party has presented in 30 years to begin to help solve a wage issue in this state. This is a place in which the Republican party will criticize the democrats regardless of how they voted. It is a no win scenario to them. If they vote against the Republican plan, then in the elections they have the stigma of not supporting education and not valuing teachers. If they vote for the Republican plan, then in the elections the finger can be pointed that they supported a tax increase. Which is the least damaging of the two (and which one actually helps out a system that is lagging) is the only choice.

    Can we find a different way to raise those income levels, sure we could have embraced the Democratic plan of eliminating the food tax, a benefit that lessens an increase on the poorest people in the state. Did that plan have enough traction to get out of the blocks, no it didn’t because the governor did not support it. Did the democratic plans of the last 30 years get a fair chance, no they didn’t.

    A super majority does not support the interests of the people,it only supports the interest of the party’s chief supporters. Who are these PAC’s that donate money to Republican candidates?

    This tax increase was the only offering that the Democratic party has had a realistic chance of impacting wages for educators in this state. While it is not the best plan out there, it is one that will work on retaining our teachers. This will add a few more applicants into the pool.

    @Ken

    I completely understand that cash register thing and those business people have my sympathy as its not going to be easy to find those books for help.

  22. John Kennedy Claussen

    The math is quite easy. If you are a child and you buy something for a dollar your sales tax will now be 5 cents instead of 4 cents (7 cents if you live in a city like Sioux Falls), because it will be rounded up as mentioned.

    However, if you are a millionaire and you buy something for $ 10,000 now, then your sales tax will be $ 450 ($ 650 in a city like Sioux Falls); and admittedly so would be the tax bill for a child with such a scenario in theory.

    But if you are a member of the “dollar store crowd” like many children and the poor and the working poor, it becomes more than just a 1/2 cent increase as a result of continual incremental rounding realities or purchases.

    Not only are sales tax systems regressive, but 1/2 cent increases in sales tax systems are also relatively further regressive against smaller purchases, which any one could make as a consumer, granted, but the poor and working poor are more likely to make them along with their children.

    I guess the poor, the working poor, and the children will definitely be doing their part to fund education now…. and was that our intent?

  23. The KELO nonsense is an unpaid advert for STEM schooling and training. It’s not a secret that journalists are mathphobic and mathchallenged. Yet, we didn’t expect anything quite this dense. Was there an editor in the building?

  24. Hey, hey, slow down and back it up a little there, Dr. Kalqless! You are writing too fast for me.
    The only place I’ve ever seen a half-penny is on a railroad track after a fast freight goes through.
    Try to pay for something with half a dollar. You will get laughed out of the bar. I know.
    1 plus 1 still equals 1, you know; you can’t change reality. It’s just part of the growing inequality.

  25. Ken, Don, so you’re telling me those businesses have already seen their computers explode implementing other fractional tax rates and dealing with the fractional pennies coming out of current multiplication problems like 1.06 x 10.01?

  26. Ken, I’ll give props to you as a small business owner for explaining the possible complexity of the problem far more substantively than KELO-TV did.

  27. “Do not worry about your difficulties in Mathematics. I can assure you mine are still greater.” —Albert Einstein.

  28. “It’s Obama’s fault,” as the kids say.

  29. Bobby Kolbe

    Wow
    If the .5 cent is a struggle
    There was a time the State and city tax as I remember was 4.85 cents per dollar. Bet that’s why merchants came unglued.

  30. Roger Cornelius

    All business and industry have to retool from time to time, the beauty of modern day computers is that they do most of the work for you.

    Otherwise, this is just another case of Y2-K

  31. Richard Schriever

    FWIW – current local sales tax rates in some SD locales include the following:

    Canova municipal 1.95%
    Standing Rock tourism 1.5%
    Rosebud tourism 1.5%
    Crow Creek tourism 1.5%
    Cheyenne tourism 1.5%

    There are also some locations (Lennox for example) that have a TEMPORARY 1% tax in addition to the 4% state and 2% municipal.

    Finally, there is the STATE tourism tax – charged @ 1.5%, which is applicable only in SOME MONTHS of the year. So – currently, those businesses that collect that STATE tourism tax at a fractional rate, have to CHANGE their tax calculations twice every year.

    To say that a ONE TIME increase to ALL sales everywhere is “too hard”……………

    Tends to make me wonder if the run-of-the-“conservative”-mill anti- government. anti-taxation crowd has even the slightest clue as to the actual structure of the tax system. I’m gonna say NOT.

  32. Good numbers, Richard! If Canova can handle decimals, so can Sioux Falls.

  33. Steve, personally I have never heard teachers called greedy.

  34. The only time I hear that charge, Marilee, is when folks like Steve are looking for an excuse to oppose funding public education.