Sales Tax Is Vital Part Of Municipal Budgets

WATER VALLEY – City officials have been busy crunching numbers as a budget was hammered out for the Fiscal Year 2021 that starts in October and one significant factor is sales tax collected in Water Valley. Sales tax is a strong indicator of the city’s economic pulse and also accounts for approximately 15 percent of the city’s proposed $3,268,546 budget.
The money comes monthly as the Mississippi Department of Revenue (DOR) sends a check for the city’s share of sales tax collected as businesses in Water Valley, approximately 18 percent of the seven percent collected in sales tax is diverted to the municipalities in which they were paid.
The latest figures from DOR show that business was up six percent in June as the city’s portion of sales tax collected was $45,659.16 compared to $42,994.83 last June. Business was also up a tad in May, almost 4.5 percent; but down half a percent in April and one percent in March.
During the August 10 budget meeting, Mayor Donald Gray noted that the sales tax collections has not dipped during recent months.
“But you hold your breath until that comes out every month,” the mayor added about the monthly check.
Gray’s comment came as city officials were contemplating the amount of sales tax collections budgeted for the upcoming fiscal year.  Ward One Alderman Kagan Coughlin cautioned that the stimulus money provided by the federal government may have been one reason sales tax didn’t take a big hit in the months following the pandemic. Coughlin also noted that the restoration work at the former Big Yank building purchased by Base Camp Coding Academy led to purchases that generated $187,000 in sales tax sent to the DOR.
“That is not going to happen again,” Coughlin said about the one-time money spent on the building restoration.

City’s portion (18%) of Sales Tax  collected during the pandemic:

Data provided by the DOR for March – June sales
Tax diversions for municipalities in Yalobusha County

Water Valley          2020               2019         Percent Change
March                    $44,725.18       $45,202.86        1.05 % Decrease
April                      $44,760.83       $45,019.27         58% Decrease
May                       $46,867.03        $44,874.83       4.25% Increase
June                       $45,659.16        $42,994.83       6.19% Increase

Coffeeville             2020                 2019
March                      $11,137.61         $14,072.59         20.85% Decrease
April                        $18,286.48        $9,976.68         83.3% Increase
May                         $9,951.99           $9,788.39         1.67% Increase
June                        $10,058.02        $10,996.44       8.53% Decrease

Oakland                  2020                 2019
March                    $6,322.33         $7,848.65         19.44% Decrease
April                       $6,830.39        $6,697.07          2% Increase
May                        $7,453.69         $6,904.28         7.95 % Increase
June                       $7,933.06         $7,437.14          6.66% Increase