New businesses credited for big June tax increase
Posted on Thursday, July 3, 2008
URL: http://www.nwanews.com/nwat/News/66759/
Sales tax receipts for the city of Fayetteville’s 1 percent sale tax are up more than $ 140, 000 during June compared to last year — an 11. 7 percent increase.
This brings the city’s receipts of this tax to a total of $ 6. 9 million for the past five months compared to $ 6. 5 million last year — a 6. 4 percent increase year to date. Sales taxes received by the city during June are collected during April.
The sales tax collections for the city’s share of the county tax collections are up 2. 57 percent compared to last year.
Paul Becker, the city’s finance director, said he is “ pleasantly surprised” with the news.
“ It was higher than I would have expected. It was welcome news, ” Becker said. “ I’m comfortable with our budget estimates. ”
Becker said the city’s total sales tax revenues received over the past five months are more than $ 156, 000 ahead of budget.
The city does not have access to sales tax information on individual businesses, he said, but “ a portion of that increase had to be related to the opening of Sam’s Club ”
“ We’re talking about a major retailer, ” he said.
He may be right about the impact of Sam’s Club, which moved in September from Springdale to Fayetteville. That could help explain why Springdale’s collections are down so much.
Springdale’s June receipts from its 1 percent sales tax were down by more than $ 67, 000 — a decrease of 7 percent. The city’s collections for the past five months are down by $ 462, 826 — 9. 65 percent.
Becker said collections from the new Malco Theatre and other new businesses in the city have also helped boost revenues.
Another factor appears to be related to the new streamlined sales tax method of payment to the cities, he said. The biggest change is that the sales tax revenues now go to the city where a delivery is located. In the past, the sales tax revenues went to the city where the sale occurred.
‘ I had anticipated it would be neutral, but it has helped, ” Becker said.