Sales tax revenue on the rise in Fayetteville
Posted on Thursday, August 28, 2008
The Sam's Club relocation and the new streamline sales tax could be the reason Fayetteville is seeing an upturn in sales tax collection and neighboring city Springdale continues to see a drop.
Paul Becker, finance director for Fayetteville, said city sales tax was up 8. 28 percent - $ 108, 109 - in August for sales made during the month of June this year compared to a year ago. He added that the city's share of the county sales tax was up 1. 55 percent - $ 14, 539 - compared to this time last year. He finished by stating that the money collected compared to the year-to-date budget through August was up 2. 14 percent, or $ 337, 935.
Becker said new businesses like Sam's Club and the new Malco Razorback Cinema opening their doors in Fayetteville were likely reasons the city has seen such a boost. The new statemandated streamlined sales tax law, which gives the collected sales tax on delivered items to the city the item is delivered to instead of where it's originally purchased, also played a role in Fayetteville's collections increase.
"The factor of new businesses coming in is no doubt helpful," Becker said. "Last year our (sales tax ) was down and that's because of (Pinnacle Promenade )."
Wyman Morgan, administrative and financial services director for Springdale, said his city's sales tax collection has been down for two years in a row, and data collected points to three main problems.
Springdale is down 7. 9 percent, or $ 79, 366, this August compared to August 2007 on sales made in June. Year-to-date, Springdale is 9. 31 percent - $ 633, 427 - behind in collections this year.
Morgan said the housing market's downturn is a major cause of the drop. He said Springdale has a large number of retail building supply stores in its city limits.
"Twelve to 15 percent of our sales tax comes from construction sales," he said.
He added that Sam's Club leaving town definitely hurt the numbers, and because Springdale has a large number of furniture stores that deliver purchases, the new streamline sales tax law is also hurting the city.
"I talked to one furniture store owner who said 60 percent of his sales were delivered to locations outside the city," Morgan said.
Springdale does have a plan of action. Morgan said infrastructure improvements and road work to make getting around the city easier should attract more residents and businesses.
"We're still working on lots of different items to attract developers," Morgan said.
He said a Wal-Mart Neighborhood Market, a Walgreens Pharmacy and a Family Dollar Store are moving into Springdale, and he hopes that will push the numbers up a little bit.
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