Wednesday, October 6, 2021
On Monday October 4, 2021, the Norfolk City Council gave final approval to the annexation of various areas adjacent to Norfolk. This will result in changes to taxation in these areas and questions have arisen as to the timing of these tax changes.
Property tax levied in 2021, which is normally paid near the delinquent dates of May 1 and September 1, 2022, will not change. Property tax levied in 2022, which will normally be paid in 2023, will reflect the annexation.
City sales tax collection in newly annexed areas is covered by Nebraska Department of Revenue regulations, which specify sales tax changes only go into effect the first day of a calendar quarter. The earliest the sales tax will go into effect for an annexed area is 120 days after the Department of Revenue receives the required annexation information from the City. This results in April 1, 2022 being the expected effective date for implementation of the City’s 1.5% sales tax in the annexed areas. Businesses in the annexed areas should receive notice from the Department of Revenue in late January of the City sales and use tax going into effect at their location on April 1.
The City’s food and beverage and lodging occupation taxes were levied to pay debt service on the $16.4 million 2010 bond issue funding the water park and other improvements at Veteran’s Memorial and Ta-Ha-Zouka Parks. These occupation taxes end November 30, 2021 when enough will be collected to pay the last of the bonds. Due to the time needed to implement the tax, the City is not requesting payment of these taxes in the newly annexed areas.
The City also has natural gas and telecommunications occupation taxes. The City requests Black Hills Energy and telecommunications companies implement these taxes as soon as practicable in the annexed areas and no later than April 1, 2022. The City requests cable TV companies implement the City’s franchise fee in a similar time frame. The City’s cable TV franchise fee will replace any County cable TV franchise fee.
For those on the City’s water and sewer systems, the “inside City limit” water rates will go into effect for all billings after October 4, 2021. This water rate is half the rate for those who reside outside of City limits. Due to the passage of LB 26 passed during the last session of the Legislature exempting residential water use from sales tax, there will be no City or State sales tax on residential water use. City sales tax will be charged on the sewer and stormwater portion of the utility bills that are sent after April 1, 2022.
If there are any questions, please call City of Norfolk Finance Officer Randy Gates at 402-844-2000.