The Norman Transcript

December 12, 2013

New law could be boon for municipal sales tax receipts

By Joy Hampton
The Norman Transcript

NORMAN — Norman, Moore and Cleveland County sales tax receipts are on an upward trend, with high hopes for a great holiday shopping season. Year-to-date, Norman sales tax receipts are up 5.32 percent — a full percentage above budget predictions.

Norman Finance Director Anthony Francisco reported that Norman’s sales tax receipts from the Oklahoma Tax Commission deposited Dec. 9 were $5,234,269. Of that amount, $747,752 are Public Safety Sales Tax dollars.

After deducting the PSST fund, the city’s receipts are up 6 percent over the same period last year.

A portion of this month’s increase could be related to a one-time rebate expected from the OTC to reconcile administration costs. The Oklahoma Municipal League has been working with the OTC on accountability for its administration fees.

“It has been determined that OTC’s cost is less than what we’ve been paying them for administration,” Mayor Cindy Rosenthal said.

Norman’s use tax receipts are also up, coming in at $234,139 compared to $214,111 last year. Use tax is primarily associated with construction. Rebuilding after the May tornadoes and the increase in storm shelters are likely contributing to that growth.

In Norman, the number of permits issued weekly for residential storm shelters has continued to be strong. In the city manager’s most recent report to city council members, 60 single-family addition/alteration permits were issued, valued at $273,214 — 40 of them were for storm shelters. It’s a trend the city has seen since the end of May.

Moore’s sales tax receipts for December were $2,709,761, an increase over last year’s collections of $2,131,304. Moore use tax rang in at $72,982, also an increase over last year’s receipts of $62,069.

While some of the Moore sales tax increase is due to the new quarter-penny park tax, the general fund receipts continue to show astounding growth, Moore Finance Director Jim Corbett said.

“We are up 18.6 percent on the 3 percent city sales tax,” Corbett said.

Cleveland County receives a half-penny sale tax for the jail fund. Those collections are up as well, with the county’s jail account receiving $667,886 in sales tax — a 10.4 percent increase over last year.

Cleveland County use tax was $31,844 — a 15.5 percent increase.

Norman and Moore could benefit even further by pending legislation. A long-term solution to the administrative cost charged by the OTC is being proposed by House Bill 1875, which the Oklahoma Municipal League is supporting.

“It is regrettable that Norman is not at the table to advocate for cities on important issues such as this,” Rosenthal said. “I’ve been advised that HB 1875 could result in more than $300,000 in additional revenue for Norman, if adopted. It is certainly my hope that our legislators will be supportive. It’s not a tax increase, it’s a recalculation.”

Norman pulled out of the OML about two years ago. The organization is the primary lobby for municipalities with state and federal lawmakers.

The OML reports that working with OTC, the agencies have verified that cities and towns are subsidizing the state’s sales and use tax enforcement.

“There is no disagreement on this point,” according to the OML.

Rep. Charles McCall and Sen. Clark Jolley are the authors of HB 1875, which was introduced in the 2013 session and will be heard early in the 2014 session. The effective date of the bill would be July 1.

HB 1875 establishes a maximum retention fee cities and towns pay at 0.5 percent of a municipality’s sales tax collections. This is a reduction from the rate cities and towns now pay, ranging from 1 percent to 1.75 percent.

Joy Hampton




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