Northwest Arkansas sales tax revenue rises 13% in February report

It was another big sales tax revenue payday for Bentonville in the February report following triple-digit growth in January. City leaders have said they don’t get too excited about boon months because a rebate often follows to negate much of the benefit.

The four largest cities in Northwest Arkansas reported total sales tax revenue of $7.074 million in the February report, up 13.11% from a year ago. February revenue represents sale collected in December, one of the busiest shopping months of the year. Each city collects a 2% local tax on the sale of goods and services with 1% going toward debt repayment and the other 1% is funneled into the city’s operating budget. This report reflects the latter.

Bentonville led the growth with a 55% gain with February revenue of $1.695 million compared to an 11% dip in the same period of 2017. For the first two months of this year, Bentonville posted revenue of $5.474 million compared to $1.982 million in the year-ago period representing a gain of 176%.

Rogers reported February revenue of $1.917 million, down 0.77% from the $1.932 million collected a year ago when the city reported a gain of 15.56%. Sales tax revenue growth has been sluggish this year for the city with the most retail establishments in the region. For the first two months of 2018 revenue totals $3.494 million, which is nearly flat with the $3.44 million reported in the same time period of 2017. Despite the timid growth, city leaders said they have budgeted for $1.43 million in monthly revenue collections and today are about $628,000 ahead of budget.

Springdale reversed its negative start to 2018 with $1.3 million in sales tax revenue this month, up 10.79% from a year ago. For the first two months, this year revenue totals $2.434 million, up 3.6% from the same period last year.

Fayetteville grew its sales tax revenue by 5.28% in the February report with a tally of $2.159 million. For the first two months of this year, Fayetteville reports sales tax revenue of $3.939 million, up 4.2% from $3.780 million received in the year-ago period.

Next month will lap one year since the state began collecting sales tax on Amazon orders which city administrators each said helped raise their revenue in 2017. The downside of more online ordering by consumers is less store traffic for retailers and restaurants which have both struggled in recent years with traffic counts. Not all online retailers collect sales tax which could be why some cities show slower growth over the past two months than the estimated national holiday sales gains of 5.4%.

Restaurant traffic growth has been stuck around 1% for the past several years, according to a new report from NPD. The research company said U.S. restaurant traffic was flat in 2017, with quick-serve restaurants seeing a 1% growth rate in traffic. The report also found consumers were after deals when they did go out to eat. One in four consumers eating out last year said they went because they had a discount. Higher menu prices throughout 2017 also kept more consumers eating at home. With the inflation again rising in food costs, higher labor costs and transportation expenses, menu prices are expected to jump again this year, weighing traffic counts down for the sixth straight year, according to the report.