Tax increase affects video rentals

By Alan Riquelmy / Selma Times – Journal

It will soon cost more to rent a movie.

The Selma City Council passed a rental tax hike Monday. The tax covers items like tuxedo rentals and video rentals.

The 1 percent increase from 3 to 4 percent will only affect businesses that lease tangible personal property, says councilwoman Rita Sims Franklin.

The increased revenues from the tax hike are needed, city officials say.

The rental tax was created in 1997 and hasn’t been increased since then, says Franklin, when it was discovered that some businesses were making an error when ringing items up at the register.

When a rental product was scanned at checkout, Franklin explained, some stores, instead of separating the sales tax revenue, were instead putting it into their gross sales.

This was not done on purpose, Franklin noted, but was merely a bookkeeping error.

Mayor James Perkins Jr. stated at the Nov. 7 public hearing on the increase that fee increases such as the rental fee were needed in order to repair Selma’s old infrastructure and deal with the rising costs of insurance, among other factors.

Taxes now gained from both sales and rentals are the same with 4 percent going to the state, 4 percent to the city of Selma and 1 percent to Dallas County.

This increase &uot;makes everybody level on the same playing field,&uot; stated Franklin.

Franklin believes the one percent increase will bring an additional $85,000 into the city’s coffers.

Rental rates for automobiles, however, will remain unaffected by the tax increase, according to Franklin. Current rates for renting an automobile are 1.5 percent.

The new rate will go into effect Jan. 1, 2003.