Sales tax revenue in October report up 10% among four large cities
by October 28, 2018 1:52 pm 455 views
Aldi opened its fifth store in Northwest Arkansas on Oct. 18 to record crowds. The store is located at 1006 S.W. 14th St. in Bentonville.
The combined sales tax revenue in Bentonville, Fayetteville, Rogers and Springdale totaled $6.027 million, up 10% from a year ago. Revenue in the October report rebounded from a tepid 1.54% gain last month for the four cities.
There is a two-month lag in the reporting as October revenue represents sales of goods and services to consumers in August. Each city collects 2% local tax on top of the state sales tax. The local tax is divided evenly by each city with 1% going to retire debt and 1% flowing into the city budget. This report reflects the latter.
Following are the revenue tallies in the October report for the four cities.
• Bentonville: $1.144 million, up 16.40%
• Fayetteville: $1.934 million, up 4.99%
• Rogers: $1.645 million, up 11.49%
• Springdale: $1.304 million, up 10.76%
Year-to-date each city in the region is tracking ahead of budget with respect to revenue collections. Bentonville is having a banner year as the retail sector in this smaller city continues to expand. Through October Bentonville has seen sales tax growth of 41% for its best year on record. The city reports revenue of $14.27 million, compared to $10.1 million a year ago period.
Aldi recently opened a new store in Bentonville and the retailer said the store is already outperforming other stores it owns in the region and in other states. More multi-family units are being built in the city to provide more affordable housing. Bentonville’s population is an estimated 50,000 and it nearly doubles in the daytime by those commuting to work.
On Thursday (Oct. 25) Bentonville Mayor Bob McCaslin told Talk Business & Politics the city’s retail expansion is chasing the growing rooftops. He is pleased with the growth in sales tax but remains cautious saying there is always a chance for tax rebates which could show up later. For that reason the city is conservative in its budgeting.
Rogers reports sales tax revenue of $16.035 million through October, up 4.9% year-over-year. The city is running ahead of budget which is $14.2 million through October and $17.2 million for the year.
Springdale continues to grow its sales tax revenue at a modest pace of 3.68% through the first 10 months of 2018. The city reports sales tax revenue of $12.485 million in line with the budget.
Fayetteville has seen sales tax growth of 4.22% this year compared to the same period in 2017. Through October, Fayetteville reports sales tax revenue of $18.489 million, compared to $17.74 million a year ago. The city has had positive growth every reported month in 2018, with June being the weakest at 1.35%. Fayetteville is also close to budget with just two months left in the year.
Consumer confidence remains strong. Moody’s issued a positive outlook for retail this year for the first time since 2015.
“The positive outlook for the US retail industry reflects increasing top line growth and operating profits as companies’ investments to improve both the online and in-store shopping experience continue to gain traction,” noted Moody’s Vice President Mickey Chadha. “The improvement has been spurred by a very strong macro-economic environment, with improving consumer confidence and low unemployment.”
Moody’s also revised its 2018 forecast for retail sector operating income to grow between 4% and 5% this year, up from 3.5% to 4% range previously predicted. He also guided higher on annual sales growth to 5%, up 4% previously forecast.
Chadha expects holiday sales to grow between 5% and 6%, slightly higher than the National Retail Federation average estimate at 4.5%. Moody’s said the higher holiday sales is a plus for Walmart, Target and Amazon.
“Growth in online sales will continue to outpace overall retail growth as more companies harness the online channel. Although still only around 15% of total US retail sales, online sales will grow to about 20% of total sales in the next five years,” Chadha noted. “Amazon will continue to dominate in e-commerce, but brick & mortar companies will gain more of the online market share as they set up their own platforms.”