City revenue up in July despite removal of tax

People shopping in Forrest City paying less in taxes until Oct. 1

People who shop in Forrest City are currently paying less in sales taxes, which according to state reports, has had no impact on the city’s tax revenue.

In fact, revenue the city receives from sales taxes increased nearly $50,000 in July, which was the first month the city did not collect the .625% tax approved by Forrest City voters in 2013 to fund city projects.

The tax election at that time included .625% to repay a bond issue for the projects, along with a permanent .25% tax to fund the city’s parks and recreation department. That election also allowed for a tax that could have been used as seed money at attract economic development projects, but that portion was never enacted.

In April this year, Forrest City voters approved reinstating the .625% tax to fund other city projects, estimated at more than $17.5 million. This sales tax, for which collections will begin on Oct. 1, will be collected until those bonds are retired.

The Arkansas Municipal League and the Arkansas Department of Finance and Administration show that during July, Forrest City collected $389,164.20 from its city sales taxes, which increased from the $340,595.17 collected by the city in sales tax revenue at the same time last year.

Forrest City Mayor Cedric Williams said the city will not collect the .625% sales tax again until this fall.

"It was terminated on June 30, so it was July, August and September that it will not be on the books, and it will come back on the books on October 1," said Williams. "However, those numbers from the Municipal League do not reflect the sales tax falling off. It doesn't show in the numbers from the Municipal League, from my understanding."

Williams said sales tax revenue remained up due to stimulus packages as well as the tax collected from online sales, which began prior to the pandemic last year.

"With the online tax being instituted, our sales tax revenue is up," said Williams. "The online tax covering online shopping as well as the stimulus checks going out kept our sales tax revenue up. That helped put money in our economy. Our restaurants remained open, so that helped drive it as well. Some people have different projects in the area, and they can have a sales tax rebate that we don't know about until after it's published."

According to City and Town magazine, the officials publication of the Arkansas Municipal League, Forrest City is one of six cities in St. Francis County that collect a municipal sales tax.

Tax revenue increased in July in Madison and Palestine, but decreased in Hughes, Wheatley and Widener. The July 2021 figures are listed with the 2020 figures in parenthesis: Hughes $7,179.90 ($7,614.05), Madison $1,722.52 ($1,232.23), Palestine $32,276.60 ($26,868.33), Wheatley $3,570.64 ($3,711.97) and Widener $2,486.79 ($4,431.99).

Municipalities in the county received $462,784.09 in July 2021 from the county sales tax, which was more than the $399,407.35 in July 2020, according to the report from the City and Town Magazine.

Each city within the county receives a share of the county taxes.

From the county tax, Forrest City received $460,137.37 in July, which is more than the amount collected the previous year of $410,143.67.

Other cities that collect revenue from the county tax are listed with the 2020 figures in parenthesis: Caldwell $11,317.86 ($10,088.18), Colt $7,708.38 ($6,870.86), Hughes $29,385.66 ($26,192.92), Madison $15,681.86 ($13,978.04), Palestine $13,887.32 ($12,378.48), Wheatley $7,239.36 ($6,452.30) and Widener $5,567.16 ($4,962.30).