Sales tax revenue for March up in Indianola, down in others

By BY STEVE WILSON FOR THE E-T,

The effect on municipal budgets from lost sales tax revenue won’t be seen until June, but transfers to cities were already down 7.3% compared to last year according to state Department of Revenue records.

Eleven cities, led by Jackson with more than $431,000 less sales tax revenue than in April 2019, had their collections drop by $100,000 or more.

Not every municipality lost sales tax revenue, as 57.6% showed an increase compared to the same time last year.

Indianola’s sales tax revenue was up 3.5% for the month over the same period last year at $180,816 versus $174,484 in 2019.

The state collects a 7% sales tax and sends 18% of it to the municipality where it was collected. The reporting works on a three-month cycle, where the retailer collects the tax at the point of sale in the first month, sends it to the DOR in the second and then the municipality receives its share of the revenue from the DOR.

The monthly DOR report is for the second stage where the DOR collects the sales tax before disbursing to municipalities.

This means that the tax implications for April, when the statewide economic shutdown related to COVID-19 entered its first full month, won’t be known until next month’s report.

Sales tax revenue collected for April, according to the monthly revenue report released by the DOR, was already down by $12 million from the same time last year or a 6.25% decrease.

It was even worse for the state’s biggest municipalities. Cities receiving $400,000 or more in monthly sales tax revenues saw an average reduction of 8.3% compared with the same time last year.

Federal funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed in March by Congress can’t be used to fill these budgetary holes, except for direct costs incurred with mitigating the COVID-19 pandemic.

Some cities are more dependent on sales tax revenue than others. Among the state’s largest cities, Tupelo is the most dependent on sales tax revenue, with 58.2% of its revenues coming from that source. Hattiesburg (46.1%) is second in terms of a percent of its city revenues coming from the sales tax and Pearl (43.88) is third.

Jackson is the state’s biggest city and receives the biggest monthly diversion of sales tax in the state. Its sales tax diversion was down more than $431,000 from the same time last year (20.3% reduction).

The worst affected city was Biloxi, which had its April diversion reduced by more than $370,000 or a 45.43% drop from the same time last year. The COVID-19 related shutdown has hit Biloxi doubly, as it also receives tax income from casinos that have been shuttered since March 17.

Clarksdale’s sales tax disbursement was down more than $14,500 or 6.6% less than the same time last year.

Greenwood’s sales tax disbursement was down more than $33,000 or 6.6% less than the same time last year.

Greenville will lose about 9.45% in sales tax revenue from this time last year, with collections down by more than $48,000.

Yazoo City’s sales tax revenues remained the same as they did in April 2019, differing by only $12.46.

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