Internet sales help Somerton revenues
SOMERTON – Somerton officials may have been bracing for the economic blow of the pandemic, but internet purchases by consumers and federal stimulus funds ended up contributing to a jump in sales tax collections in the first quarter of the current fiscal year.
From July to September, Somerton coffers took in nearly $500,000 from the city’s 3.3 percent sales tax and almost $450,000 in revenue as its share of the state sales tax of 5.6 percent, according to a recent report presented by Somerton Finance Director Czarina Gallegos to the city council.
“(The figures show) we are on an upward trend, and that’s mainly because of internet sales,” she told the council. “We are seeing the sales tax revenue numbers even amid the current situation with COVID-19.”
The city closed fiscal 2019-20 on June 30 with a little more than $1.7 million in revenue from state sales tax and nearly $2.4 from the city sales tax, up from the prior fiscal year. The revenue jump came even as the pandemic that reached Yuma County in March was taking a toll on the local economy.
Hector Tapia, Somerton’s economic director, likewise attributed the better-than-expected sales tax collections to the preference of Somerton residents to shop online.
“People haven’t stopped buy basic need items from local businesses, so the pandemic hasn’t impacted sales too much,” he said. “But also, residents are shopping a lot on the internet, and when the Somerton address appearins on the bills of sale, those taxes come to the city, no matter the location of the business selling the product.”
From October 2019 to June of this eyar, the city took in nearly $101,000 in revenue from the tax on internet sales.
Federal stimulus funds allocated through the CARES Act, including unemployment payments, also helped Somerton residents maintain their spending habits, he added.
Even if no more relief funds come from the federal government, he added, the months ahead should see a jump in sales in Somerton businesses, and a corresponding jump in sales tax revenue, owing to the arrival of the agricultural season.
“We all knew that COVID-19 would have an effect on city finances, but we are on a trend that is much better than what we expected,” City Administrator Jerry Cabrera said.