Northwest Arkansas sales tax revenue grows 12.28% in January report

The four biggest cities in Northwest Arkansas reported a cumulative 12.28% gain in sales tax revenue in the January reports. Revenue totaled $7.032 million, compared to $6.263 million reported a year ago.

Much of that gain came from a 49.16% jump in Bentonville’s revenue. Springdale reported a 7.37% surge and Fayetteville saw a 6.04% increase. This was contrasted by a 1.44% decline in revenue Rogers reported for the month.

January sales tax revenue relates to sales conducted in November. Each city collects local tax on sales and services and this report reflects 1% of that local tax that flows into the city’s budgets. There is a two-month lag in the data.

Compared to January 2019 the city has grown the monthly revenue by more than $634,000. Bentonville officials have said the city has been helped by collection of taxes for online sales from Amazon and other retailers without a presence in Arkansas. Bentonville sales tax revenue grew 5.69% in 2020 from the prior year to total $16.337 million. This reversed a 6.49% decline in the prior year.

Rogers set an annual sales tax revenue budget for $19.900 million this year, which is flat against the 2020 budget. This is the first time in more than six years the city has held the sales tax budget steady with no annual increase. This cautious stance comes in light of gradually declining sales tax revenue growth over the past five years. Rogers’ sales tax revenue in 2020 rose 1.56% from the prior year, while also coming in slightly ahead of the goal at $20.578 million. The city has seen annual sales tax revenue rise from $17.26 million in 2016 to over $20.5 million last year. But the annual growth rate has declined from 7% in 2016 to 5.32% in 2019, falling under 2% last year.

Springdale kicked off 2021 with a strong start with sales tax revenue of $1.465 million, up 7.37% from a year ago. This comes on heels of 8.31% annual growth in 2020 from the prior year. Mayor Doug Sprouse said the city also has benefited from more online shopping amid the pandemic. He said sales lost to neighboring Fayetteville or Rogers are less now that more residents are ordering online. He said population growth in the city and the recent annexation of Bethel Heights also are a factor in sales tax growth.

He is cautious about 2021 growth saying the city budgets conservatively as there are still wildcards with the economy around the pandemic and timeline for returning to normalcy.

Fayetteville also had strong sales tax growth in the January report to start 2021 at 6.04%. The city reported $2.06 million in sales tax revenue, compared to $1.943 million in the year-ago period. This is the first year on record for more than $2 million revenue reported in January. The city crossed into the $2 million monthly range in the August 2019 report and has stayed through January.

The city reported 2020 revenue of $23.642 million, a gain of 4.65%, the biggest annual growth in four years. City officials also said they budget conservatively in this climate of unpredictability.