SALES TAX REPORT: Revenue generated surpasses known records

By Jeri Pearson

Sales tax revenue reported for the month of May continue to astound officials who said the increased income is a boon to budgets.

Sales tax collected for the county in May was reported at $179,727, which is more than $45,500 over the same month last year, and more than $55,000 over what was collected in 2017 for the same month.

“It has been awesome,” County Judge Brandon Ellison said. “We had the biggest collection since I have been here –  maybe ever – last month. It has been up for the year and up substantially over last year.

“It is trending higher and it speaks well for us at the county and the state,” Ellison continued, noting he has considered if inflation has contributed to the increase.

“I’m very concerned about inflation for businesses, individuals and the county,” he said. “The county purchases materials – steel, wood, gas, and so on, and the price of everything is all up. That affects what it cost to do business.

However Ellison noted that increased sales tax helps the budget continue to be balanced.

“Sales tax is helping and if it stays that way, that’s a good thing,” he said. “I don’t know any other reason why it is up, other than Internet sales tax, which we started collecting last year. In the 2019 legislative session, there was a marketplace fairness bill to collect Internet sales tax and deliver locally. I think that was a critical measure to enact. It is difficult to get hard numbers on what is driving everything.”

Mena Municipal Airport Manager Fred Ogden reported to Mena City council that revenue generated from fuel sales have also seen an increase.

“It was a good month at the airport,” he said. “Fuel sales held their own and are about average. Things are getting back to normal (after COVID).”

Ogden commented that the distribution of state tax revenue generated from the fuel sales saw a significant increase.

“Those numbers have been coming in about $300 or 400 a month and had been low, but this month we got checks for about $3,000 – thats a lot of sales tax collected in fuel sales.”

Ogden told the council that he has a call in to the state auditors office to verify the numbers, but that he has heard reports of similar revenue increases have been observed throughout the state.

City councilwoman Terri Nugent, who chairs the Advertising and Promotions Commission, also reported  an increase of more than $11,000 for May to the council.

“We can do more for Mena, for Tapley Park and the promotion of our great city,” she said.

2020

After two months of lost revenue were observed during the COVID-19 pandemic in 2020, however the majority of the year resulted in increased sales tax.

Taxes collected in April 2020, were down $2,308.68 from 2019. However, after stay at home orders were lifted, sales tax revenue picked up. June 2020 purchases equated to $152,123, which was $29,269 more than the amount collected in the same month 2019.

“Though I don’t get a breakdown of how people are spending their money, I assume people are spending their money at home,” Tanya Fretz, Polk County Treasurer, said of last year’s sales tax report. “I think people are not going out of town as often and are spending locally.”

Ellison said he thought sales tax fared well last year, though he continued to monitor the revenue stream.

About Sales Tax

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.

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.

Earlier this year, voters in Polk County renewed the sunset sales tax for another seven years, while state-wide sales tax was renewed by voters throughout Arkansas last year.

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