MuskogeePhoenix.com, Muskogee, OK

Local News

January 10, 2013

Sales tax receipts show 5 percent increase

City brings in $1.96M, according to Dec. report

Muskogee’s sales tax receipts show signs of a slightly improved economy, according to the most recent figures released by the Oklahoma Tax Commission.

Data included in the commission’s December report reveal the city received nearly $1.96 million for actual sales reported Oct. 16-31 and estimated sales for Nov. 1-15. The city’s share of the receipts represents a 5.07 percent increase, or $94,519, from the $1.86 million it received during the same period in 2011.

The commission’s December report shows use tax collections increased more than 23 percent from the year-over-year comparison. Muskogee’s use tax receipts for the most recent reporting period totaled $133,613, up $24,990 from the $108,623 reported a year ago. Use taxes are assessed on purchases of out-of-state goods for in-state consumption or use.

The report caps sales and use tax receipts distributed by the Oklahoma Tax Commission to municipalities and counties for the first half of fiscal year 2013, which began July 1. Sales and use tax receipts reported during the first five months of the fiscal year remained relatively flat compared with revenue collected for the same period a year ago.

During the first six months of this fiscal year, the city has received $11.52 million in sales tax revenue — up 1.86 percent, or $210,000, from a year ago. Use tax receipts for the first half of the fiscal year total $675,193 — up 3.84 percent, or almost $25,000 from 2011.

City Manager Greg Buckley said he is looking forward to seeing the January and February reports, which will reflect holiday sales. He cited cautious optimism about the bump revealed in the most recent distribution.

“It’s going in the right direction, but I guess I’m still a little gun shy,” Buckley said. “There is still some optimism, but there are still challenges at the federal level we are still going to have to deal with coming up in a couple months.”

Buckley said what looks like will be another Washington battle over the national debt ceiling and spending cuts could impact any local recovery that might be on the horizon. The pinch of the payroll tax hike that kicks in this month for almost every American worker also threatens to slow consumer spending.

The payroll tax increase comes with the expiration of a temporary 2 percent drop in Social Security tax withholdings that took effect two years ago. For the past two years, the wage earner’s share of the Social Security tax was reduced to 4.2 percent for the first $113,700 of a worker’s annual income. That rate returned to 6.2 percent beginning Jan. 1. As a result, a worker with an annual income of $50,000 will see take-home earnings shrink this year by about $1,000.

“We just got the notice on the payroll tax and haven’t had a full pay cycle, so employees won’t know how that will affect them until later this month,” Buckley said. “They might look at their checks later this month and say, ‘Oops, I need to start cutting back.’”

Buckley said shopping locally is one factor that could help cushion city coffers. Experts estimate local retailers lose out on about $700 million in annual sales as a result of residents traveling to Broken Arrow and Tulsa to shop.

“If we could reduce that by just 10 percent, that would be another $2.8 million we could add to our annual budget,” Buckley said. “That is huge for us.”

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

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