The city’s chief financial officer, Mike Bernsen, Tuesday told the Columbus City Council of an increase in sales tax paid in February.
“We have received the sales tax money for April and it’s about $15,000 more than it was at this time last year,” Bernsen said.
In the biggest April returns, since 2002, $735,789 was collected and will go into the city’s general fund, as part of its operating budget for Fiscal Year 2012.
The tax money was paid by consumers, at a rate of five percent, when goods or services were purchased in February. The merchants then paid the money to the state in March and the city received its share in April. Although the city’s tax is seven percent, the collected amount is minus the two-percent tourism tax, which is paid separately by the state. The tourism tax, also known as the “restaurant and hotel tax” is divided between the Columbus-Lowndes Convention and Visitors Bureau and the city. The CVB receives the restaurant portion, which is levied on restaurants, with annual sales of $325,000 or more. The city receives the hotel portion of the sales tax. The tourism tax went into effect in 1986 and cannot be repealed, until 2018, under provisions set by the Mississippi Department of Revenue.
“We received about $138,000 this month from the restaurant tax,” CVB Executive Director Nancy Carpenter said. “This is definitely an increase from this time last year. I think the three fishing tournaments we held contributed to this. We’ve also had a lot of new restaurants open and that combined with the stability of our established restaurants is increasing the sales tax.”
When asked what he thought contributed to the increase, Bernsen said there were a number of factors to consider.
“People have been asking me this question and I don’t have a definitive answer,” Bernsen said. “I think it’s because of the general improvement of the economy. But our downtown area has been a big part of it, as well. Retail sales are up so far. Car sales are also increasing. I think things are getting close to being back to normal.”
Homer Beaty, owner of the Fashion Barn, thinks most downtown businesses are having a solid first quarter, financially.
“I think downtown as a whole is doing well,” he said. “We have been blessed; we are having a good first quarter. There are more restaurants and shops downtown and that helps all of us.”
For one downtown business owner, the first quarter of 2012 has proven to be quite significant.
“I’m about 11 percent over my first quarter sales from last year,” Front Door/Back Door owner Sarah Labensky said. “And that’s pretty substantial.”
Megan Westby, owner of Savvy Spaces Marketplace, said her numbers had not dramatically increased from last year, but she feels confident about the immediate future.
“Honestly, my numbers are about the same,” Westby said. “But if I can project anything, I’m hoping we will see an increase during Market Street (Festival). This is our second year of Market Street and I’m very, very optimistic about our potential sales for that weekend.”
Columbus Main Street Director Amber Brislin said she received good first-quarter reports from most of her merchants.
“Downtown continues to grow and thrive,” said Brislin. “We are very fortunate, in a challenging economic time, that our citizens are still spending and continue to shop and dine downtown.”
And Jonathon Breckenridge of Carl Hogan Toyota concurred with Bernsen about an increase in car sales.
“We are up 73 percent from last year,” Breckenridge said. “We are having one of the best first quarter’s we’ve ever had. We are selling more used cars and we have seen an increase in our parts department and our service department.”
Columbus wasn’t the only city reporting an increase in collected sales tax. Lisa Klutts, accountant for the city of West Point, reported gross collections of $160,790.88 in February, an increase of $17,672.21 over February 2011.
Jeff Clark was previously a reporter for The Dispatch.
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