MuskogeePhoenix.com, Muskogee, OK

Local News

April 2, 2013

Sales tax revenues continue to slide

Officials speculate fault lies in state's software

— Muskogee’s sales tax collections dipped for the second consecutive month compared with disbursements reported for the same period a year ago, Oklahoma Tax Commission data show.

The city’s share of sales and use tax revenue from actual sales reported Jan. 16-31 and estimated sales for Feb. 1-15 totaled almost $1.96 million. That represents a decrease of 11.13 percent, or $245,359, from the nearly $2.21 million reported for the same period a year ago.

The Tax Commission report published in March shows sales and use tax collections declined for the second consecutive month when compared with figures reported for the same period in 2012.

Sales tax disbursements totaled just more than $1.81 million for the first full reporting period after the holiday shopping season. That is down $20,103, or 1.1 percent, from the more than $1.83 million reported for the same period a year ago.

Disbursements for the city’s use tax — assessed on purchases of out-of-state goods for in-state use or consumption — fell significantly for the March reporting period. Use tax disbursements totaled almost $145,288 for the reporting period this year, which is down $225,256, or 60.8 percent, from figures reported a year ago.

The executive director of the Oklahoma Municipal League, Carolyn Stager, stated in a letter dated March 20 to City Manager Greg Buckley that recent dips may stem from glitches with the Tax Commission’s new software. During a Feb. 15 meeting with tax officials, “it was disclosed that approximately 1,100 taxpayers failed to report correctly under OTC’s recently activated multimillion-dollar software upgrade.”

“Several municipalities have reported lower February sales (and) use tax receipts as is Muskogee,” Stager wrote, noting a similar trend for the state’s share of collections. “This week we have received reports of some questionable dips with several significant remitters in February. OTC has been notified and we are awaiting their response.”

The March report comes just as city officials begin to plan the budget for fiscal year 2014, which begins July 1. Buckley met with department heads Friday afternoon to discuss and rank needs. City councilors will convene their annual budget retreat  Friday to discuss goals and priorities.

Mayor Bob Coburn said that since the discovery of the software problems in December, disbursement figures have “looked surprisingly low to me.”

“With the number of people who said they had a good Christmas season, it just doesn’t seem feasible that collections would be as low as they have been,” Coburn said. “The people I have talked to say things are looking up, and I am very disappointed that sales tax collections would be so flat.”

Figures released by the Oklahoma Tax Commission for the first six months of this  fiscal year show the city’s share was up 1.86 percent, or $210,000, from the previous year. The numbers since have fallen short of expectations.

“That is exactly why I am hammering on that study,” Coburn said about efforts to teach area residents about the importance of shopping locally. “We have to get our sales tax in order. That is mandatory for us. We are just allowing money to flow outside Muskogee every month.”

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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