Breaking News

Sales Tax Collections Showing Improvement

BY MELANIE WADE –

Although 2017 sales tax collections for Polk County are still more than $9,000 below collections this same time in 2016, monthly collections were up for the third month in a row.

For the month of July 2017, the 1-cent sales tax collections were $126,808.33, up by $4,309.12 from July 2016, an increase of 3.5%. The 1-cent road improvement tax reflects the same figures. The total collected for 2017 so far is $835,522.08, a 1.1% decrease from the same period last year when $844,953.58 was collected.

The year has seen several months of negative collections when compared to the same time last year, however, it is consistent with a yearly trend, causing little concern for county officials, at this time. With internet sales suspected for a portion of the decline in revenues, officials remain hopeful that reinforcing the importance of shopping local as well as pending legislation that would impose sales tax on internet sales will both help change/correct the declining trend.

In an interview in January, Polk County Judge Brandon Ellison gave his thoughts on the decrease in collections over the last several years. “I think internet sales have something to do with it. It hurts local businesses and rural counties because we don’t have the services that are available online. Delivery trucks and 18-wheeler traffic bringing things in have tripled in the last few years. It’s a little discouraging that our taxes aren’t growing like they should, especially with the increased traffic.”

At that time Ellison also stated, “We encourage people to spend money at home. internet sales are not taxed. It has certainly taken off and people buy a lot of stuff online and it’s really unfair to brick and mortar businesses at the local level. They’ve taken the risk and made the investment and they are having to collect state, county, and local taxes while the internet sales don’t. I think it is probably affecting more rural Arkansas counties also.”

Mena City Council passed Resolution 1339 on July 11, 2017 that supports proposed federal and state legislation to insure the proper assessment and collection of sales tax from all internet and online sales, no matter where that business is located.  The Arkansas Municipal League asked each city in the state to pass a similar resolution and to send it to Arkansas Governor Asa Hutchinson to encourage him to call a special session for legislators to vote on the matter. Amazon.com is ahead of the game when it comes to the concept. The large online retailer made it their own policy to begin collecting local and state sales taxes. Mena received their first payment from Amazon in May. Although it is not yet a significant number, legislation could increase it drastically if tax dollars are submitted from more online retailers.

Amid big-box retailers and the convenience of ordering online, many rural communities have felt the crunch, whether directly as a storeowner, or indirectly as a citizen of a town whose sales tax collections continue to decline. Shopping locally has long been the staple of many small communities, and recently there has been a popular movement to go back to the roots of local shopping as communities try to revive their economies.

Not only does shopping locally revive an area’s economy, there are many more benefits as well. Shopping locally provides a personalized experience that is often unique. Providing jobs to locals, who in turn spend their money locally, keeps a larger share of tax dollars in the area. And, according to the Institute for Local Self-Reliance, “In an increasingly homogenized world, communities that preserve their one-of-a-kind businesses and distinctive character have an economic advantage.”

One comment

  1. Mena is moving in the wrong direction when they seek to curtail internet business, locally or nationally: Asking small entities to become the unpaid tax collectors for 6,000+ taxing jurisdictions is patently ludicrous, anti-competitive, and until further Congressional notice against current federal law (which dictates interstate commerce).

    E-commerce is THE fastest growing segment of the retail economy, yet some misguided state and local “authorities” seem to think it is somehow immoral or behaving badly, for simply being enterprising in America? They ignore the fact that there are already in place annual sales tax (user tax) requirements, which work — if the honor system is followed, as it should be. That honor system is in place for a host of compliance areas, and should be respected, at minimum, by elected officials.

    Beyond that, any Arkansas retailer collects taxes on in-state sales; asking them to then become the unpaid tax collectors for Maine and Montana and Mississippi is a plan only an entrenched bureaucracy will love.

    Rather than an onus on more & more sales taxes, how about the local tax spenders save where they can, including less turnover in hospital administrators, fewer Main Street and I-69 studies, and fewer grandiose public venue projects that don’t pan out. How many MILLIONS have been blown in the last 20+ years, despite the targeted internet and catalog sales, on these gross costs to the public? What has Mena benefitted from the studies and personnel changes, and under-used auditoriums and sports facilities?

    The logical (less bureaucratic) national sales tax regime change would be the Point Of Sale system (not the vapid Point Of Destination boondoggle we got a few years back), which would make it simple and still competitive, for any retailer, online or otherwise — with a commensurate drop in income and property taxes.

    We refer you to NetChoice (netchoice.org) for related information.

    The elected powers need to start with cutting repetitive and borderline costs, while supporting viable new businesses, and frankly stop the constant coddling of the Big Boxes that are the only true beneficiaries of a massive new tax & spend system.

Leave a Reply

Your email address will not be published. Required fields are marked *