Sales tax numbers start slow for 2009

Posted by Chad Lawhorn

March 17, 2009 at 12:37 p.m.

It’s still early in the game, but city leaders find themselves in a bit of a hole when it comes to sales tax collections in 2009.

The city has received both its January and February sales tax distributions from the state, and the total is down by 2.1 percent from the same period a year ago.

In January and February this year, the city collected $3.54 million in local sales tax. In 2008, the total was $3.62 million.

City Hall leaders, though, caution that one or two months worth of sales tax data does not make a trend. The monthly numbers can vary significantly because of errors in reporting, or if a major retailer was late in submitting its monthly totals to the state.

The budget-makers at City Hall are certainly hoping that something like that happened in February because those numbers were dismal.

The city’s February sales tax check was down 10 percent -- or nearly $186,000 -- from the same period a year ago. If that’s the new trend, commissioners certainly will have a hard time making this year’s budget work.

The January and February numbers basically show sales activity for the period from mid-December to mid-January because the sales tax reports come about 30 to 45 days after the actual sales are made.

As a reminder, the new sales taxes approved by voters in November will start being charged April 1. The new rate will increase from 7.3 percent to 7.85 percent.