To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Trish Muller, Finance Director
Pete Mangers, Revenue Manager
Title
April 2020 Sales Tax Report
Body
________________________________________________________________________________
Executive Summary
Attached are the sales tax reports for April (collected in May) and YTD. The information is provided by area (sales tax districts) and NAICS category (industry). The month of April’s gross sales tax collections were down 8.6% from the previous year’s month or down $338,684 compared to April 2019. YTD is up 2.8% mostly due to January and February of this year. Additionally, Town sales tax is above our budgeted numbers YTD by 4.3% or $630,000. Staff was anticipating April 2020 to be one of the worst sales tax months of the year with May 2020 being a close second. With retail slowly opening to the public, we anticipate May to be similar to April and then, barring a new spike, retail to slowly begin to return to a new normal but likely down compared to prior years. During these uncertain times, staff is closely monitoring trending, including regional trends and will update Council accordingly.
Please note gross sales tax collections equates to all dollars collected by the Revenue Division. This would include sales tax revenue for the Town and the Promenade sales tax credit PIF, of which we share 27.5% of the sales tax generated in the Promenade. We also share back sales tax increment in the Downtown area with the DDA over the base set in 2008. Net sales tax revenue equates to only sales tax revenue for the Town.
|
2020 Net Revenue Calculation for the Town |
|
|
|
2019 |
2020 |
$ Change |
% Change |
|
Gross Collections |
$ 15,045,217 |
$ 15,465,881 |
$ (420,664) |
2.8% |
|
Less Audit and non-Town Revenue |
$ 843,852 |
$ 1,131,384 |
$ 287,532 |
34.1% |
|
Net Collections |
$ 14,201,364 |
$ 14,334,498 |
$ 133,134 |
0.9% |
Geographic Areas - The Milestone/Metzler is up 2.6% YTD. The Outlet Mall, which was closed most, if not all, of April, is down 45.6% YTD. Out of Town category is up 12.4% and the Out of State category is up 22.9% there has been significant online ordering from many out of Town/State businesses through the pandemic. The Promenade category shows an increase due to the addition of several new locations over the past year and is up 11.9% YTD. The Downtown category is down 3.4% YTD. Staff will continue to monitor all areas moving forward.
Industry Areas - For the year, Miscellaneous Retail is up 17.4% and Food/General Merchandise is up 20.9% mostly due to grocery store and pharmacy purchases during the pandemic. Additionally, the estimate tax on food for home consumption (Grocery Tax) has been updated and is now is estimated to be approximately $7.84 million for 2019. Additionally, 60% of grocery tax is generated from non-residents.
The Apparel and Accessories category is down 43.2%. Restaurant/bars category is down 15.2%. Home and Garden stores are showing an increase of 11.9%, mostly due to purchases during the stay at home order. Home projects are a big focus for residents at home during this time staff will continue to monitor all aspects in these areas and report any concerns.
Audit Revenue - $674,393 in audit revenue was collected through April 2020, compared to $352,953 collected through April 2019 showing an increase of 91.1%. Of the $420,665 of increase YTD $674,393 has been due to audit revenue. Without audit revenue the Town would be down 1.7%. Audit revenue collections reflect payments received through April. These amounts are included in the gross sales tax collections. They are removed when showing net sales tax revenue to the Town.
Overall for 2020 we are entering a new retail climate that may take the rest of the year to normalize/understand, staff will continue to watch trends as 2020 rides this new wave of uncertainty and will inform Council accordingly. The outlook for sales tax will remain murky concerning this year and staff will continue to monitor this very critical revenue stream.