Sales tax receipts up despite pandemic

Despite the pandemic, Siloam Springs city sales tax receipts 7.58 percent in June, according to the July issue of City & Town Magazine.

Siloam Springs received $760,768 in city sales tax receipts in June, which represent taxes collected during the month of April, compared to $707,148 in June 2019. The city saw a 12.65 percent increase in sales taxes collected in March and distributed in May compared to the same months in 2019.

Year to date totals for June show the city has received 11.9 percent more in sales taxes than it had the same time last year, according to City Administrator Phillip Patterson. In June of 2019, the city was only ahead of 2018 year-to-date sales tax receipts by 0.4 percent, he said.

"This is very positive," he said. "Our conservative approach to projecting sales tax revenue is to use a rolling 10-year average, which was 3.3 percent in 2019. For the 2020 budget, we projected sales tax revenue to be flat. If the remaining months in 2020 continue on their current trend as it relates to sales tax receipts this will be very positive for the city."

Finance Director Christina Petriches initially estimated in April the city could experience an 8 percent reduction in budgeted revenue from all sources, including sales taxes and utility sales, for the current year due to the pandemic, Patterson said at the time.

The city cut its budget by an estimated $2.9 million in April, or about 8 percent, in preparation for the possibility of decreased revenues. Patterson said he plans to meet with city staff this week to review the cuts and see what will likely be put back into the budget.

"However, as I reported to the board last week, electric revenue is down compared to last year so we'll have to take that into account when we review the prior budget cuts," he said.

North American Industry Classification System (NAICS) codes show trends of how money was being spent locally in April. The state does not give the city data on individual businesses, but does provide the city with a listing of codes that can be used to estimate trends in various types of businesses, Patterson said.

There are 149 NAICS codes for Siloam Springs businesses, up from 143 categories last year, he said. Some of the category names are vague so it can be difficult to guess which types of businesses they represent.

The sales tax receipts returned to the city represent just 2 percent of the purchased amounts, so the total amount of money spent in each category can be quite large, according to Patterson.

For June 2020 receipts compared to June 2019, the largest increases were other general merchandise stores, up $33,000 or 16 percent; NAICS with less than three businesses (which are not revealed in order to keep the data of individual businesses private) up $36,000 or 124 percent; grocery stores up $8,000 or 25 percent; electronic shopping and mail-order houses up $17,000 or 234 percent; commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance up $10,000 or 353 percent; and building supplies dealers up almost $24,000 or 36 percent.

County sales tax receipts were down 11 percent, from $328,169 in June 2019 to $292,040 this year.

The city's sales tax receipts come from its 2 percent sales tax. The total sales tax rate in Siloam Springs is 9.5 percent. City sales tax receipts are used for utility infrastructure, repayment of wastewater treatment plant bonds, the city's general fund, public safety and the street department.

A share of county sales tax receipts pays on two water utility infrastructure bonds.

Some cities in Northwest Arkansas saw major decreases while others were up even more than Siloam Springs.

Other cities that saw an increase in sales tax receipts were:

• Gentry, up 20.15 percent to $122,644

• Lincoln, up 19.62 percent to $53,094

• Springdale, up 8.63 percent to $2.87 million.

Cities that saw a decrease in sales tax were:

• Bentonville, down 16.86 percent to $2.33 million

• Eureka Springs, down 44.93 percent to $116,764

• Fayetteville, down 11.3 percent to $423,811

• Rogers, down 19.45 percent to $2.8 million.