Fort Smith sales tax revenue beats budget estimates in May report
City of Fort Smith tax revenue posted healthy gains in the May report, with the city’s portion of the Sebastian County 1% tax up more than 7% and more than 6% above the budget estimate. Year-to-date revenue to the city from the countywide tax is up more than 4%.
According to the city’s sales tax report posted late Monday (June 29), the city’s portion of the countywide tax totaled $2.044 million, 7.5% more than the $1.903 million in the May 2025 report. The revenue was 6.5% above the budget estimate. The city’s share of the countywide tax provides money for the city’s general fund budget, with much of that budget paying for police, fire and other essential city services.
In the first five reporting months of the year, the countywide tax has generated $10.417 million, up 4.6% compared with $9.958 million collected during the same period of 2025.
Following are data points provided in the report by Andrew Richards, the city’s chief financial officer.
• Total gross receipts for May 2026 were more than the same month in 2025 and 2024, but slightly less than 2023.
• Retail trade, representing 53% of total, was down slightly compared to the same month in the prior three years.
• Food services sales (12% of total) was more than the same month in the past three years.
• Wholesale trade (6% of total) was down 11.75% compared to May 2025
• Manufacturing (6% of total) was up 22% in May 2026 compared to the average of the prior three years.
• Rebates+audits were $255,352, compared to $470,831 in 2025, and slightly less than the average for the past three years, resulting in the city’s net receipts being higher in May 2026 compared to 2025, trailing May 2023 and 2024.
The report also showed that tax revenue from retail sales, which totaled $2.758 million, was down 4.7% compared with May 2023 tax revenue from retail sales of $2.895 million.
Richards told Talk Business & Politics that declines in sales of jewelry and building materials and supplies primarily contributed to the decline between the May 2026 and May 2023 reports. Tax revenue from building materials was $375,099 in the May 2026 report, down 7.6% compared with $441,050 in the May 2023 report. Tax revenue from jewelry sales was $22,736 in the May 2026 report, 343% below the $100,684 in the May 2023 report. Newton’s Jewelers, a popular jewelry store operating in downtown Fort Smith for 109 years, closed in April 2023.
“It appears that a drop in building material sales and the absence of a certain large local jeweler likely account for the 5% decline in retail sales tax receipts,” Richards said. “I’m not overly concerned by the decline from 2023. I view 2023 as a blockbuster year for consumer spending of post-pandemic savings, making this a natural transition back to normal consumer behavior.”
The city’s 1% tax, which now partially funds federally-mandated sewer system work in addition to street, bridge and drainage projects, was $2.423 million in the May report, up 6.2% compared with May 2025 and 5.13% above the budget estimate.
The city also collects a second 1% tax, with 62.5% of the revenue funding consent decree work, 12.5% supporting the city’s police department, and 25% providing funds for the city’s parks and recreation department.
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