City sees bump in local sales tax revenue
Local merchants appeared to have enjoyed a good month in June, as the City of Greenville’s sales tax rebate revenue had another increase during the month.
The city’s year to date revenue total is also showing improvement from the same point one year ago, according to a report released Wednesday by the Texas Comptroller’s office.
However the city’s monthly receipts will be a little lighter in the near future, as it pays back more than $2.7 million in sales tax revenue a state court has ruled was improperly collected.
Wednesday’s report covers sales made at Greenville businesses in June, which were submitted to the Comptroller’s office in July.
The City of Greenville will receive a sales tax payment of $574,288.75, representing an increase of 3.32 percent from the $555,790.94 collected in August 2012 and also above the $515,555.20 received during August 2011. The city took in $537,505.61 in August 2010, and $517,028 in August 2009.
Sales taxes are one of the two main sources of revenue, along with property taxes, which feed the city’s general fund. A rededication of a percentage of the sales tax revenue goes toward the 4A economic development corporation.
So far this fiscal year, Greenville has received $4.16 million in sales tax rebate revenue, an increase of 7.65 percent from the $3.86 million collected through the same point 12 months ago. The city had received just over $3.7 million through August 2011, and $3.89 million in sales tax rebate revenue through August 2010.
But the collections will be a little lighter for decades to come, as the city begins to repay millions of dollars in sales tax revenue it owes to the State of Texas.
“We owe the state $2,774,542,” said Interim City Manager Massoud Ebrahim, adding the state agreed to a 30-year term of paying back the revenue. “We have to make monthly payments of $7,708 and we have to make 360 payments.”
Ebrahim said the payments are expected to begin next month and will cost the City of Greenville more than $92,000 in revenue per year.
“We are doing everything we can to get a longer term,” Ebrahim said, which would mean lower monthly payments.
In March 2012, the Comptroller’s Office notified the City of Greenville that it would postpone the collection of more than $2.7 million in sales tax revenue.
The state agency had previously indicated the city would be required to refund the money, based on a sales tax exemption expanded significantly by the Austin Court of Appeals.