VERMILLION, S.D. (AP) — A loophole around state law may undercut the malt beverage tax revenue approved by Vermillion voters last July.

The Yankton Press & Dakotan reports that the way state law is written, the 5 percent markup on the wholesale purchases of malt beverages by businesses only applies to those that hold malt beverage licenses.

Five local business owners are exercising a loophole in state law that allows them to circumvent charging their customers the tax by dropping their malt beverage licenses.

Officials say that will impact the city's budget by about $12,000 per year. The money was intended to pay for the Prentis Park Pool project.

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