Sales Tax Receipts Continue To Rise

FARMINGTON — Local sales tax receipts are up for the first two months of 2021 for Farmington, Lincoln and Prairie Grove, compared to the same period last year.

Sales tax revenues distributed by the state represent sales from two months earlier, so receipts received in January represent sales made in November, and local sales tax revenue received in February are from sales made in December.

Farmington Tax Receipts

Farmington collects a local 2% sales tax rate. Of this, 1% goes into the general fund. For the second 1%, a portion is dedicated to paying off recreation and street improvement bond funds, and the rest goes into the general fund.

Farmington received $ 176,605 from its local sales tax rate for January for the general fund, compared to $ 130,378 received in January 2020, a 35% increase, according to city financial reports. Of the

January total receipts, the city received $103,247 from the first 1% local tax. For the second 1% sales tax, almost $ 30,000 was for the bond debt and about $73,000 for the general fund, according to Melissa McCarville, city business manager.

The city received $191,113 in local tax revenues in February for the general fund, compared to $148,481 in February 2020, an increase of almost 29%. Of the February total, $110,500 came from the first penny tax. For the second 1% local sales tax, about $30,000 was for bond debt, and $80,612 was deposited into the general fund, McCarville said.

Lincoln Tax Receipts

Lincoln received $26,117 from its 1% sales tax in January, compared to $24,862 received in January 2020, a 5% increase, according to Rhonda Hulse, city business manager.

For February, the city’s 1% sales tax distribution was $29,624, compared to $28,045 in February 2020, a 5.6% increase.

Lincoln presently has a 2% sales tax rate. Of this, 1% goes to capital improvements and the balance to parks, library and debt.

Voters approved a new 1% sales tax in November 2020, for the Lincoln police and fire departments. The new tax takes effect April 1 and the city should receive its first revenue from this tax on July 1, said city attorney Steve Zega by email last week.

Prairie Grove

The city of Prairie Grove received $63,621 for January for its 1% sales tax, compared to $51,504 for January 2020, a 23.5% increase, according to city officials.

For February, Prairie Grove received $69,053 per 1% sales tax, compared to $56,736 for February 2020, a 21.7% increase.

Prairie Grove’s local sales tax rate is 2.75%, with the revenue going to debt payments, parks and the library, equipment and capital improvements, and police and fire salaries.

Officials from all three cities have given several reasons why they believe sales tax receipts have increased during a year dominated by the covid-19 pandemic.

These reasons include ongoing residential and commercial construction and sales tax collections from internet sales. They also have noted that more people appear to be purchasing locally because of the pandemic, instead of traveling to Fayetteville and other cities in Northwest Arkansas.