The Norman Transcript

June 12, 2013

Norman sales tax running below projections

By Joy Hampton
The Norman Transcript

NORMAN — Norman sales tax collections continue to fall below budget predictions, with the last receipt of the fiscal year rolling in well under budget predictions this month.

Studies indicating that online shopping is growing in the college population could provide a reason for Norman’s flagging tax receipts, and legislation under consideration might provide the solution. But e-fairness legislation is seemingly lost in a U.S. House subcommittee, and Norman must make do while hoping other revenue makes up the difference. This month’s disappointing sales tax numbers are no surprise, Norman Finance Director Anthony Francisco said.

“That’s the trend that we’ve been on,” Francisco said. “We do expect to grow some from here, but this was not a surprise.”

Norman received its last disbursement, $4,963,078, from the Oklahoma Tax Commission for the fiscal year on June 10. Of that total, $709,010 will be diverted to the Public Safety Sales Tax fund as is required by ballot mandate. June tax receipts for Norman are up $68,247, or 1.63 percent more than collections for the same time period last year — well below the 4.2 percent increase the city budgeted.

Midway through the fiscal year, other revenues were above budget predictions enough to make up the difference. At that time, general revenue funds as a whole had remained on target. However, that has been slipping in recent months.

“We were about 0.3 percent below, which is really pretty much on budget,” Francisco said.

This month’s total general fund revenue isn’t known at this time.

The fiscal year ends June 30. Francisco is budgeting a 4.2 percent increase for next year, FY 2014, with the belief the city can hit that growth target because of this year’s low collections.

There is no easy answer as to why sales tax collections were disappointing this year, Francisco said.

“It’s complex, with a lot of moving parts, but it’s related to the economy and the psychological impacts,” Francisco said. “I think people are just cautious, particularly as it relates to discretionary spending.”

Francisco also said it is believed that Norman is more impacted by online shopping than the average Oklahoma community because of the increasing popularity of online shopping by college students and younger consumers.

The Marketplace Fairness Act could provide at least a partial solution to Norman’s sales tax woes. The act would force Internet businesses to remit sales tax based on point of delivery.

The act gives states the authority to compel online and catalog retailers to collect sales tax at the time of a transaction.

The act was passed in the Senate in May but has apparently stalled in the subcommittee of Regulatory Reform, Commercial and Antitrust Law in the U.S. House of Representatives.

Moore sales tax collections continued an upward trend. Receipts of $2,314,903 were up 5.5 percent over collections for the same time period last year. That increase does not include the one-quarter cent sales tax approved for park improvements, Moore City Finance Manager Jim Corbett said.

“We’re very happy with growth, especially at this time, following tornado season,” Corbett said. “Most of that collection would have been prior to the May 20 tornado.”

Corbett said city leadership expects a slight decline in future sales tax, then a bump in tax as recovery progresses. That bump will likely show up in the August collections.

“I think the July tax will be down,” Corbett said. “Several businesses were closed for days and it’s been difficult to get into the area.”

This was the first month the recently approved park tax was received, he said.

Joy Hampton