Fort Smith sales tax revenue up in October, beats budget estimate

Fort Smith sales tax revenue in the October report showed higher revenue than the same time in 2024 for the second month in a row, and the monthly revenue also was better than the budget estimate.

The city’s share of the Sebastian County sales tax was $2.086 million, up 3.3% compared to $2.019 million reported in October 2024, according to the city’s sales tax report. The October county tax share, which measures September’s transactions, was up 3.07% compared to the projected October 2025 revenue listed in the city’s budget.

Sales tax revenue numbers are provided monthly to Arkansas cities and counties by the Arkansas Department of Finance and Administration.

The year-to-date countywide tax total for Fort Smith is $20.435 million, up 3.07% from the $20.024 million generated through October 2024, and up 0.01% from the budget estimate. The tax brought in $24.49 million in 2024, 0.95% lower than 2023.

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.

“While the October sales tax report does look very good, it is just above budgeted numbers for the month,” said Acting City Administrator Jeff Dingman. “We were aggressive with sales tax revenue estimates for 2025, and this is only the third of ten months that didn’t fall short of that projection. This helps with budget planning by telling us to be more conservative in estimating sales tax revenues for 2026. While we remain optimistic that we will see increases in sales tax revenues in the near future, we need to realize some upward movement before we increase our budget estimates.”

The 1% city sales tax generated $2.496 million in October, up 3.65% from the $2.408 million in October 2024. That tax broke down to $1.56 million for streets, bridges and drainage and $935,844 for federal consent decree work required to make sewer system improvements.

The city’s budget for those revenues was $1.557 million for streets, bridges and drainage and $933,969 for consent decree, resulting in the revenue 0.2% above the budget projection.

For the first 10 reporting months of 2025, the tax generated $24.646 million, up 0.26% compared with the $24.581 million in the same period of 2024. That tax brought in $29.516 million in 2024.

Fort Smith voters in May approved a sales tax reallocation plan to provide $360 million over 30 years to fund federally-mandated sewer system work. The vote reallocated a 0.75% sales tax first approved by voters in 2022 to pay for consent decree work and to pay bonds, with 0.125% used for the Fort Smith Police Department. It also renewed the 1% street tax but reallocated 0.625% for streets, bridges and drainage work, with the remainder of the tax to fund consent decree work and bonds.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2024: $29.51 million
2023: $29.92 million
2022: $28.65 million
2021: $26.66 million
2020: $22.66 million
2019: $21.73 million
2018: $21.5 million

Fort Smith portion of 1% Sebastian County sales tax
2024: $24.49 million
2023: $24.64 million
2022: $23.55 million
2021: $21.49 million
2020: $18.24 million
2019: $17.26 million
2018: $17.04 million
2017: $16.69 million