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Sales Tax Shows Decline for Fourth Month This Year

BY MELANIE BUCK –

County Treasurer Tanya Fretz reported that $132,460.84 was collected in the month of September for the 1% general sales tax, and the same amount collected for the 1% road improvement tax, a decline of $12,000 from this same time last year.

Sales tax revenue for the month of September shows a $6,962.67 decrease from the same time period last year and marks a $12,712.69 decrease for the year to date totals, leaving a 1.1% decrease overall.

This is the second month in a row to show such a heavy loss. Last month, sales tax revenue was down more than $3,600. September is the fourth month in 2016 that has showed a moderate to sharp decline from the previous year. May showed a $6,563.34 decrease from the previous May and June showed a $13,933.67 decrease from June 2015.

So far this year, the 1% sales tax general revenue has garnered $1,107,714.34 and the same amount has been collected for the 1% road improvement tax.

Polk County Judge Brandon Ellison admitted that he’s concerned about the stagnancy of the sales tax collections, “It’s unique to each county or city whether sales tax is up or not. I am a little concerned because it seems to be a trend. Sales tax came up overall at the end of last year and I was hopeful that would continue. The county had gone up significantly every year until 2008 and it became pretty much stagnant. There’s not a lot of growth but at least, we aren’t going backwards.”

Ellison acknowledged that business has been challenging, “Everybody knows that the last eight or ten years, wages have not gone up, business has been tough. I’ve seen business cycles but I’ve never seen one last this long. I’ve seen them for two or three years but not usually this long… we’ve been in one of those bad business cycles for the last eight or ten years.”

In 2015 and 2014, there were also months of sharp decline but overall 2014 ended with 6.9% increase over 2013 by end of year and in 2015, a 4.1% increase over 2014 by end of year.

Ellison explained that while sales tax is not growing like he would like and he is concerned, it is not catastrophic and the county is taking the appropriate measures, “At the same time, inflation hasn’t been ridiculous and as long as fuel prices don’t go up, I think we’ll be fine. It’s not catastrophic at this point. We are trying to squirrel back any money we can for our jail.  We’ve been working on budgets for 2017 and we’re keeping them the same as we have for the last four or five years. We’re not spending any money on our buildings and so forth… eventually, though, that will catch up with you.”

Ellison speculates that internet sales could be a contributing factor, “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.”

Ellison mentioned the Marketplace Fairness Act and hopes that it will garner more support to fix the issue at the federal level because it would require sales tax on all internet sales.

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