Numbers released from the Texas Comptroller’s Office shows a six percent increase in sales tax revenue for the City of Waxahachie over a 12-month period beginning last April.
Sales tax revenue goes into the city’s general fund, which supports the city’s operations.
The comptroller's report found the city had total sales tax collections of $1,395,810.55 in April 2018, up from $1,317,347.56 in April 2017. It also shows a 1.60 percent increase year to date for sales from January to June. The year-to-date sales tax collections for 2017 totaled $8,563,076.75.
Texas imposes a 6.25 percent state sales-and-use tax on all retail sales, leases, and rentals of most goods, as well as taxable services. Local taxing jurisdictions can also impose up to a two percent sales-and-use tax for a maximum combined rate of 8.25 percent.
Charles Harris, City of Waxahachie Director of Finance, stated an increase in population does not strictly drive sales tax. Though he did note the U.S. Census Bureau reports Waxahachie to have a population around 35,340 people as of July 1, 2017.
“Your population does not mean that is who your shoppers are going to be. There are a lot of other factors besides population that drives sales tax,” Harris said. “The populations of the surrounding areas and the shopping opportunities in competing areas are factors.”
Harris stated convenience is another factor that drives sales tax because if a store opens up closer a person’s home, they have the tendency to shop closer to where they live.
“Sales tax figures are probably the most violate major revenue (source) at least in the short term,” Harris said. “ They can fluctuate month to month.”
Harris explained the specifics behind the increase are not released to him by the comptroller’s office because they are considered to be proprietary information by retailers.
He stated the city is in a very healthy place fiscally and feels that the retail base will continue to expand. However, Harris noted the expansion of the retail base does not mean, “sales tax will keep pace with it.”
City Manager Michael Scott stated sales make up 34 percent of the city’s annual budget, which is more than $13 million. He noted sales tax, property tax, and various fees and transfers make up the city’s general fund. The general fund then disperses funds to pay for city operations apart from water and wastewater operations.
Doug Barnes, Waxahachie Director of Economic Development, shared Harris’ thought about how sales tax can vary from month to month, which can make predicting a trend difficult. He noted the city draws people from across Ellis County as well as parts of Navarro and Hill Counties.
“Looking at the location of Waxahachie in the southern part of the Metroplex we have found that our growth potential is huge in terms of residential, retail, and industrial expansion,” Barnes said. “As long that continues, and people come into our community we think sales tax revenues are going to continue to increase.”
Barnes stated the increase would help to improve the quality of life resources and city services, which will help to drive people to relocate to the community.
“The businesses that have located here in Waxahachie are doing quite well,” Barnes said. “They are providing services for our citizens, so they don’t necessarily have to leave the city to get those basic services.”