Sales tax revenue increases despite COVID-19

Sales tax revenue increases despite COVID-19

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Philadelphia’s state sales tax rebate numbers are up again for the second month while many municipalities across the state were down because of the coronavirus pandemic.

According to the state Department of Revenue’s June report, Philadelphia received $416,787, which was an increase of $24,807 when compared to June 2019.

Municipalities collect sales tax for the state and receive a portion back. While it is not absolute, the report is a general indicator of the local businesses climate. This report is based on the May diversions from sales taxes collected.

“We are very pleased,” Mayor James Young said. “It shows a lot of people are doing business locally which is something we always encourage.”

For the state’s Fiscal Year 2020, which ended June 30, Philadelphia received $4,361,418 which is up $67,629 from the same point last year.

Statewide, many municipalities continued to see their sales tax rebate drop because of the economic shutdown.

Cities use the rebate money for day-to-day operations. At budget time, cities estimate what the sales tax will be throughout the year. Should revenues fall below the estimates, often cuts must be made to balance the budget by the end of the Municipal Fiscal Year on September 30.      

“Our economic drivers have been our grocery stores and Lowe’s,” Main Street director Tim Moore said. “Our grocery stores were running over.”

In addition, many restaurants also stayed open and provided curb-side service.

While this is good news, it’s not over. Philadelphia can expect to see a drop in sales tax collections in July because of the cancelation of the Choctaw Indian Fair and the Neshoba County Fair because of COVID-19. Both fairs bring in huge crowds and that brings an influx of out-of-town shoppers into local stores.

Mississippi paid out $41,767,566 to municipalities in June 2020. This was up $2,031,746 when compared to June 2019. For the state’s fiscal year which ended June 30, the state has returned $449,392,740 which is a $156,923 decrease when compared to this point last year.






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