Hot Springs’ sales tax collections have been riding the crest of a five-month rally since out-of-state internet retailers began collecting state and local sales taxes in July.
Third-quarter collections of the city’s 1% general fund sales tax rose almost 10% compared to the 2018 July-August-September period. October and November collections were up a combined 12.44% compared to 2018, putting the $12,824,534 in collections the city reported for the first 11 months of 2019 ahead of the previous year’s pace by 6.35%, or $766,297.
The tax raised $13,318,300 in 2018 and is trending toward $14 million for 2019, a marker that Act 822 has helped bring within reach. Internet retailers with aggregate annual sales in Arkansas of $100,000 or 200 transactions and e-commerce facilitators such as Amazon and eBay have been required to collect sales taxes since the law took effect July 1.
The city has realized a bonanza since then, with collections rising 10.83% compared to the July-through-November period of 2018, while the previous six months saw modest growth of 2.74%.
“I am confident that some of that increase is due to all of the great things that are going on here in Hot Springs,” Dorethea Yates, the city’s finance director/treasurer, said in an email to city department heads and the Hot Springs Board of Directors. “But obviously the ability to collect taxes on internet sales has had a major impact.”
November collections rose 11.76%, the third consecutive month of double-digit growth and sixth consecutive positive month. Collections haven’t dipped since the 0.39%, or $4,517, drop in May. November marked the eighth consecutive month collections beat projections, exceeding the revenue forecast by 11.73%, or $126,229.
Collections through the first 11 months of 2019 are 4.53%, or $556,002, ahead of the pace needed to meet the $13,606,778 revenue projection for the year. The city’s 2020 adopted budget projected a 2.50% increase over last year’s projection.
The 3% hospitality tax the Hot Springs Advertising and Promotion Commission levies on prepared food and lodging inside the city extended its streak of year-over-year gains to 16 months. The $501,487 the commission reported in November collections beat 2018 by 7.87%, or $36,575.
The tax collected $6,475,479 through the first 11 months of 2019, putting it 8.80%, or $523,815, ahead of the 2018 pace. The commission reported a 13.73% gain for November in taxes collected by the more than 70 hotels, RV parks and campgrounds within its taxing authority. Collections from the more than 300 restaurants, food trucks, grocery and convenience stores subject to the tax rose 6.42%.
Garland County has yet to report November collections of the 0.50% countywide sales tax it levies in support of its general and solid waste funds.
Local on 01/27/2020
Print Headline: Internet collections spur sales tax bonanza