By Jeri Borst
After two months of lost revenue during the COVID-19 pandemic, sales tax in Polk County has begun generating income.
Taxes collected in April, which were generated with purchases in March, were down $2,308.68 from last year. However, after stay at home orders were lifted, sales tax revenue picked up. June purchases equated to $152,123.34 in July’s collected sales tax, which is $29,269.81 more than the amount collected in the same month last year.
“Though I don’t get a break down of how people are spending their money, I assume people are spending their money at home,” Tanya Fretz, Polk County Treasurer, said. “I think people are not going out of town as often and are spending locally.”
County Judge Brandon Ellison said he thinks sales tax is fairing well, but said he continues to monitor the revenue stream.
“With the virus we were concerned about revenue loss, but it has done well over all,” he said, noting online sales were having an effect on tax revenue.
“Last legislative session, there was a marketplace fairness bill to collect internet sales tax and deliver locally,” he said. “I think that was a critical measure to enact.”
Sales tax in Polk County is 8.5 percent, with 6.5 of that being state sales tax. Inside city limits, sales tax is higher and includes an Advertising and Promotions tax paid at businesses related to tourism, such as restaurants and lodging.
The two percent the county collects is made of two 1 cent sales taxes.
The first county sales tax is permanent. Passed in 1990, it is allocated to the County Road Improvement Fund, law enforcement and jail, rural volunteer fire departments, solid waste and other projects deemed necessary to maintain county services.
Ellison said county tax is also important municipalities because a percentage of the tax revenue is allocated to cities based on population.
The second of the two one-cent county sales taxes was established in 2007 and must be renewed by voters every seven years. Funds from the 2007 sales tax can be used to pay bonds, improve roads and bridges, as well as drainage improvements. It can also be used to purchase equipment.
“I do like the sunset personally,” Ellison said. “We need to be accountable for it and show what we are doing with it. If we are good stewards, people will vote to renew the tax.”
The sunset sales tax will likely be on the May 2021 ballot for renewal, Ellison said, noting a state sales tax is on the ballot this November.
ISSUE 1 is a renewal ten-year-ballot initiative for four-lane highways. Though Polk County does not have four-lane highways, Ellison said it is a tax critical to counties and municipalities.
“Polk county voters did not vote favorably for that in 2012, because it was perceived that it is a state wide tax with no benefit to us locally.
“However it some $400,000 was distributed from the state to us,” Ellison explained. “Whatever they collect on that, counties divvy up 15 percent, and cities get 15 percent. That’s money from across the state coming back home, so it is a good thing.”
Photo by Jeri Borst
Judy Drye, left, prepares to checkout at James Super Save Foods, as Dean Lott completes her purchase with Debbie Thompson. Customers and employees have been required to wear a mask since Gov. Asa Hutchinson’s executive order, which has been in effect since Monday, July 20.