Dakota County Jail,

Corrections Officer Adam Hough watches security camera feeds at the Dakota County Jail in Dakota City on March 26. Dakota County is eliminating a special tax created to fund jail construction. 

Jim Lee, Sioux City Journal

DAKOTA CITY | Store purchases in Dakota County, Neb., are about to cost a tiny bit less.

The county is eliminating a half-cent sales tax created in 2005 to generate money for a new Dakota City jail. Voters in August 2004 approved the tax to cover the $7 million construction. It applied to most retail purchases.

Officials at the time said adding a tax was better than raising property taxes.

The jail, in the Dakota County Courthouse at 1601 Broadway St., opened in 2006.

The sales tax generated $1.03 million in the first year and a total of $7.8 million. Collections were above the required payments on the 10-year bonds, so officials decided to end the tax Jan. 1.

"We are paying them off a year early," said Joan Spencer, an assistant to the Dakota County Board. “That is good news.”

The Nebraska Department of Revenue says Dakota County is the only county statewide to levy a sales tax. The practice is more common among cities.

A small portion of the Dakota County tax also went to pay for improvements at the joint city-county Law Enforcement Center in South Sioux City.

In a November 2010 referendum, South Sioux City voters approved an extension of the sales tax once the jail was paid off. The city will use the money for infrastructure needs into the future, said South Sioux City Clerk Sue Murray-Lee.

The jail was built off the northwest corner of the courthouse. The former second-floor jail, built in 1976 to handle short-term incarceration, was outdated.

-- The Associated Press contributed to this report.

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