2025 Fort Smith sales tax down less than 1%, up in fourth quarter

December 2025 sales tax receipts lagged slightly behind years past, but Fort Smith city officials remain optimistic. Part of the optimism is founded in tax revenue showing gains in the fourth quarter of the year.

Andrew Richards, Fort Smith’s chief financial officer, said that while December’s gross receipts were slightly lower than prior years, there were less rebates claimed and audit adjustments offsetting the city’s distribution.

“Net receipts were higher than December 2024,” Richards said.

He also noted that while the retail trade sector was lagging in 2025 compared to 2024, there was consistent growth in the accommodation and food services sector.

“The last quarter of 2025 shows 1.7% growth in gross receipts over the prior year,” Richards said. “The city’s sales tax revenues ended better than it started in 2025.”

According to the December sales tax report, Fort Smith’s share of the Sebastian County sales tax was $24.489 million in 2025, 0.02% lower than $24.493 million in 2024 and 2.5% lower than the $25.117 million budget estimate for the year.

In December, the city collected $2.068 million from the tax, 1.04% higher than $2.047 million collected in December 2024 and 0.56% more than the budget estimate of $2.057 million. December tax collections reflect November sales.

The city’s share of the countywide tax is important 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. Until 2024, the tax had posted year-over-year gains for five years. The 2024 revenue was 0.95% lower than 2023.

STREET, CONSENT DECREE FUNDS
The 1% city sales tax generated $29.513 million in 2025, down 0.01% from $29.513 million in 2024. Starting in June, that tax went from strictly funding maintenance and new construction on streets, bridges and drainage, to being split between streets, bridges and drainage and dedicated consent decree work.

For the year, the tax generated $22.962 million for streets, bridges and drainage, 2.84% less than the budgeted $23.632 million. The tax generated $6.551 million for consent decree work, 1.65% less than the $6.661 million budgeted.

In December, the tax generated $2.501 million, 0.16% more than December 2024.

“The city ended the year with receipts 2.5%-2.6% below annual budget projections, but 2025 annual receipts were within 0.02% of the 2024 annual receipts,” Richards said.

Looking at the other funds, the 0.25% sales tax dedicated to the fire department and parks department generated $7.378 million in 2025, down 0.01% from $7.379 million collected in 2023. The city also collects a 5/8% sales tax for federal consent decree work to improve the city’s sewer system, which generated $18.444 million, down 0.02% from $18.448 million in 2024. The city also collects a 1/8% tax going to the police, which brought in $3.691 million in 2024, up 0.03% from the $3.69 million in 2024, according to the city’s report.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets and consent decree
2025: $29.513 million
2024: $29.516 million
2023: $29.924 million
2022: $28.65 million
2021: $26.667 million
2020: $22.66 million
2019: $21.73 million

Fort Smith portion of 1% countywide sales tax
2025: $24.489 million
2024: $24.493 million
2023: $24.648 million
2022: $23.553 million
2021: $21.49 million
2020: $18.246 million
2019: $17.265 million