Sales and use tax receipt collections in Jonesboro and Craighead County continue to rebound after falling behind earlier this year. The city has collected $8.988 million in sales and use taxes through the end of June, a 1% increase ($87,111) from the same period in 2017, according to the city. Craighead County collected $9.898 million, a less than 1% drop ($70,000) from the same period last year.
The sales tax collection numbers have been better in the city in recent months, and that’s a positive sign, Mayor Harold Perrin told Talk Business & Politics.
“We’re starting to see a little improvement, which is a relief. We are not close to where we’d like to be, to be honest. But we are starting to see some growth over last year, and we are about 1% better than we budgeted. But our budget was very conservative,” Perrin said.
Virtually the entire budget surplus as compared to last year was collected in June. The city collected $1.480 million that month, a 6.25% spike as compared to June 2017. It helped to make up the difference from a major drop in April. The city had dropped 9.98% ($139,105) in April, and for the year was behind in projected collections until the numbers started to rebound in May. It was the least amount of sales and use taxes reported in April since 2014 when the city collected $1.265 million. It was the second consecutive month the city had a decline.
Sales and use tax numbers are 60 days behind, meaning the latest numbers represent collections from April.
Perrin previously told Talk Business & Politics he thinks one reason the city sales tax numbers have stagnated, despite other economic indicators showing robust growth, is the expansion of online sales. Items sold online are not subject to sales tax collection, and it has had an impact, but Perrin doesn’t know exactly what it has been, he said.
Last week the U.S. Supreme Court, in a 5-4 ruling, reversed a previous high court ruling, opening the door for states such as Arkansas to collect sales tax on e-commerce sold goods.
Civic leaders, economists, and others have competing theories as to why Northeast Arkansas has experienced consistent economic growth during the last four decades. The region’s diverse jobs base – agriculture, food processing, health and medical, Arkansas State University, and professional services – have had an insulating effect, but economic gains are also tied to population growth.
Since the early 1970s, Jonesboro has grown by about 3% each year, according to the U.S. Census Bureau. As of 2016, the city had about 76,000 residents. Jonesboro was the fifth largest city in Arkansas based on population in the 2010 census. The city is the second largest in terms of geographic size, trailing Little Rock.