Fort Smith sales tax revenue dips in February report

Fort Smith sales tax took a downward turn in February. The February sales tax report shows the city’s share of the 1% Sebastian County sales tax was down more than 3% from February 2023 and the 1% tax for city streets was down almost 5%.

The city’s share of the Sebastian County 1% sales tax totaled $1.813 million, down 3.21% compared to the $1.874 million reported in February 2023, according to the city’s February sales tax report released Monday (March 25). In the first two months of the year, the tax generated $4.154 million in revenue, down 0.26% from the $4.165 generated through February 2023.

The city’s share of the countywide tax is closely watched because the revenue provides money for the city’s general fund budget, with much of that budget paying for police, fire and other essential city services. The February report measures January’s transactions.

“The last time sales tax receipts experienced a decline was in March 2020, four years ago. That is an impressive four year run of sales tax growth,” City Administrator Carl Geffken said. “We have been stating for the past several months that sales tax collections were going to flatten when compared to last year and budget due to the impact of higher interest rates. This will continue until the impact of the construction at the 188th for the (Foreign Military Sales) project begins.”

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.144 million in February, the report shows. That is down 4.74% from the $2.25 million reported in January 2023 and from what is estimated for the month in the city’s budget for the year.

Revenue from the tax for January and February combined was $4.982 million, down 1.62% from the $5.064 million generated from the tax in the first two months of last year.

In 2023, the city received $24.648 million in revenue from the city’s share of the countywide tax. The 2023 revenue was $806,742 more than city officials budgeted to spend within the fund budget and $3.095 million more than the tax generated in 2022. The tax has posted year-over-year gains for the past five years with 2022’s revenue coming in 9.6% more than 2021. Fort Smith’s 1% street tax generated $29.924 million in 2023, up 4.23% over the budget estimate.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2023: $29.924 million
2022: $28.65 million
2021: $26.667 million
2020: $22.66 million
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million

Fort Smith portion of 1% countywide sales tax
2023: $24.648 million
2022: $23.553 million
2021: $21.49 million
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million