City receives good news in sales tax report
Sales tax in May was significantly better in Boonville than last year as the state continues to open up from stay-at-home orders from the past few months.
Revenue is up 25% compared to last year, so the city has made up its 10% loss this month, City Administrator Kate Fjell said.
Missouri fully opened Tuesday with the relaxing of Phase 1 rules in the Show-Me Strong Recovery Plan. The state of emergency remains in place, however, through Dec. 30.
“We are basically back on par,” Fjell said. “In March and April we were down 10 percent, but in May we were significantly more.”
Some funds received by the city this month are from returns the Missouri Department of Revenue received from May 1-30, department Communications Director Anne Marie Moy wrote in a statement.
Fjell is not quite sure why there was an increase, but guesses it might be from a pent-up need to make purchases.
“Some of it you can kind of visualize, but I can’t tell you why,” Fjell said, adding there usually is an increase in November and December, which is easier to expect and track.
Sales tax revenue May 2019 was just over $111,000. This year it topped out above $138,000. This year’s reports for May don’t compare to 2016 and 2017, though. Those years, revenue topped out at about $145,000 and $144,000, respectively.
March returns were due April 30. Any returns received after that date possibly were distributed in the June report, Moy wrote. April returns were due May 20. Portions of the April returns were distributed this month, while what remains will be distributed in July.
Fjell was surprised and shocked by the reports.
“I had heard, which makes sense, that obviously our grocery stores were doing well,”she said. “The other thing is that maybe we pulled in more regional shoppers. It’s hard to tell what consumer behavior is.”
It will be interesting to see what the June and July reports bring, Fjell said.
“Maybe there was pent up demand because people were home and now they feel free,” she said. “Maybe that is some of it, but I don’t know how long that carries out, so it’s hard to tell.”
Fjell has quit trying to forecast sales tax projections, which could go 1-2% either way. Reports also are affected by when companies and businesses submit sales tax reports. Bigger companies like Walmart do theirs monthly, while some businesses report quarterly, once a year or every six months, Fjell said.
Boonville has multiple sales tax revenue streams, such as the general tax, CIP tax, parks and storm water tax, Kemper tax and a use tax for internet purchases or out-of-state equipment purchases.
“Again, I guess maybe more people were shopping on the internet,” Fjell said. “The idea is that you are using it here so that’s why you are paying the [use] tax.”
June’s report won’t come out until around July 10. Fjell is curious to see what the next two months bring. It could normalize back to the more regular level, she said.
“We pretty much made up our losses-which is great,”Fjell said. “We haven’t had a lot of good news, and considering our last two figures were low, I kind of figured we would be 10 percent off again for May because we weren’t really back yet. But everything is starting to open again.
“The Boonville City Council just approved opening up our parks for tournaments starting in July. I think you are also seeing more people out on the Katy Trail, and more people are out and about, so that can only be a good thing for all of us in terms of the economy.”