Sales tax increase performing better than expected

Construction tax collections improve 22 percent

Retail stores like the ones pictured above are the City’s top sales tax generators, accounting for more than 60 percent of Fiscal Year 18’s collected sales tax. (Travis Rains/Daily Miner)

Retail stores like the ones pictured above are the City’s top sales tax generators, accounting for more than 60 percent of Fiscal Year 18’s collected sales tax. (Travis Rains/Daily Miner)

KINGMAN – Revenue collections from the City’s sales tax have continued to increase throughout the past six months, even more so when taking into account the additional 1 percent Transaction Privilege Tax increase, which according to City Finance Director Tina Moline surpassed the $3.1 million projection.

Moline presented fourth and final quarter financial data on sales tax revenue collections to Council at its meeting Tuesday. The City in Fiscal Year 2018 collected $21.8 million, including the 1 percent TPT increase, which is up 24 percent from last year.

“We had estimated that we would receive $3.1 million from that 1 percent, and we did,” Moline said. “We beat that just barely by about 2.4 percent, $3.174 million is what we collected during this period.”

Those collections are awarded to pavement preservation and capital improvement projects, equally split at about $1.587 million for each.

Part of the data Moline presented excluded the additional 1 percent increase so as to enable the City to accurately compare figures from fiscal years 2016, 2017 and 2018.

“We ended Fiscal Year 18 with our retail business code being our primary contributor to those revenues,” Moline told Council. “That is nothing out of the ordinary.”

Retail collections increased by about 5.5 percent from the last fiscal year and make up about 61 percent, approximately $11 million, of the $18.5 million collected by the City in FY18. Those figures exclude the 1 percent TPT increase and amount to a 5.9 percent total increase in collections from FY17.

Most of the five major revenue generators in the retail category saw increases with the exception of food and beverage stores being down from $387,393 in FY17 to $361,178, and general merchandise stores from $1.077 million to $1.075 million. Motor vehicle and parts dealers, durable goods wholesalers, and building material and garden equipment supplies all saw collection increases.

“We always need to think about any sort of retailers that might be under construction or might be remodeling or might be closed for business for a short period of time, and that is part of the reason for this decline,” Moline said of food and beverage, and general merchandise. “If we were to have collected some of those sales, we would be above where we were in FY17, so certainly nothing to be alarmed about.”

Restaurants and bars was the next largest contributing category and brought in about $2.9 million, followed by hotels at approximately $1.8 million. Those three largest categories comprise about 85 percent of collections, with the approximate 15 percent remaining coming from construction, utilities, residential and commercial leases, tangible personal property and leases, and “other.”

Construction collections didn’t quite reach $1 million and came in at about $950,000. However, Moline noted that is a substantial increase from the last fiscal year.

“Real important to point out is that construction sales tax, we see there that it’s almost a 22 percent increase,” she said. “And you can look around and that’s easy to notice.”