February sales tax revenue drops across the region

by Kim Souza ([email protected]) 278 views 

Consumers are spending but the largest cities in Northwest Arkansas continue to see rebates impacting their sales tax revenue through February. Fayetteville, Springdale, Rogers and Bentonville reported total sales tax revenue of $6.53 million, down 7.69% from February 2018. The bulk of that decline was related to another large drop in Bentonville’s sales tax revenue, but all the cities saw slightly negative or muted growth in revenue.

Cumulative sales tax revenue among the four largest cities totaled $12.33 million, down 19.3% compared to $15.29 million in the same period last year.

February revenue relates to sales tax collected in December. Consumer retail sales overall were lower than expected in December according to a recent Commerce Department report. Despite the 2.3% retail sales growth, Walmart and other retailers have reported solid fourth-quarter sales. While the overall retail sales were up year-over-year, it was the month-to-month change that declined. Economists have said the response was a bit overdone as retail sales in December were far from dreadful.

Each city collects local sales tax on top of the state rate of 6.75%. This report reflects 1% of the local tax which flows into the city budgets. The other tax collected goes to retire debt and is not reflected in this report.

City officials have said the recent declines likely relate to rebates given to large businesses. Rogers is the only city among the four to report its rebate activity, which was $185,035 in January. Rogers reported February revenue of $1.92 million, up 0.14% from a year ago. Given the large rebate in January, city officials expect there was a rebate offsetting growth in February.  As one of the major retail centers in the region, Rogers continues to see sales tax revenue growth amid further expansion. Duluth Trading Co. will be opening this summer and the much anticipated Topgolf venue is also expected to break ground this spring and open in 2020.

Bentonville has the widest swings in revenue and after a banner 2018 growth of 37.9%, the city is off to a sluggish start this year. After a 70.47% drop last month, sales tax revenue of $1.17 million was down 30.92% in February. The first two months of comparisons in 2019 are against huge gains in 2018 of 326% and 55%, respectively. City officials are confident the revenue will level off some and they say the $2.28 million collected to date in 2019 is still well within budget.

Springdale had the highest revenue growth in February at $1.33 million, up 2.37%. For the first two months of the year, revenue totaled $2.58 million, compared to $2.43 million, a 6% gain from a year ago. City leaders have said there continues to be interest in more development on the west side of Interstate 49 near Arkansas Children’s Northwest.

Fayetteville also continues to expand to the west with more restaurants and retail establishments like CJs Butcher Boy Burgers at 3484 W. Wedington Drive. February sales tax revenue totaled $2.10 million for the city of Fayetteville, down 2.46% year over year. For the first two months of 2019 revenue has totaled $ 3.97 million, flat against the $3.94 million reported a year ago.


$1.17 million, down 30.92%
$2.10 million, down 2.46%
$1.92 million, up 0.14%
$1.33 million, up 2.37%