TAX NEWS - June 2010

Ohio Tax: Marion County June sales tax revenue shows strength

MARION — With half the year's county sales tax payments in for 2010, the total is up about 5 percent from a year ago, according to figures from the county auditor's office.
 
The sales tax revenue payment for June, which is from March sales collected in April, was $631,344.17, or 16.4 percent more than last year, said Angela Smith, finance supervisor for the Marion County Auditor's Office.

A year ago, sales tax revenue for June was $103,715.26 less than this year. The 2010 June payment also exceeds that collected in 2008, and is only $6,000 less than what was collected in 2007, the same year that set a record for total sales tax collected at about $7.2 million.

The motor vehicle tax payments received more than doubled from the last collection to the most recent one paid in June, indicating significant auto sales increases from February to March.

Spencer Mathews, sales manager at Mathews Auto Group, said sales have been increasing and are better than last year, but figures still aren't as high as he'd like them to be.

"March is always typically one of the best months of the year for car sales," he said. "The weather breaks, maybe income tax refunds play a part in it," Mathews said.

After the Cash for Clunkers program last July and August, he said new car sales tailed off a little bit.

Last year, motor vehicle taxes that went to the county that could be attributed to sales from the program brought in about $62,000 from July and $98,000 from August. Sales tapered off to bring in $75,000 in motor vehicle taxes for the county from September sales, then averaged about $50,000 a month until March sales. That month, which is included in the total June sales tax payment to the county, automotive sales contributed almost $115,000, or about 18 percent of Marion County's sales tax revenue for the month.

Two other types of payments are sales tax from vendors that have licenses only in Marion County, usually small businesses, and statewide master numbers, which include vendors that have licenses in more than one county in the state, said Ohio Department of Taxation spokesman Mike McKinney.

The master numbers category is usually characterized as chain retailers, he said. Those brought in about $258,000 for the county for the month, and the sales tax from vendors with licenses only in Marion County brought in about $139,000. Other sales taxes revenues include such categories as watercraft and outboard motors and liquor control.

Sales tax revenue across the state was down for most of 2009, McKinney said, because of the national recession affecting the state economy.

This year's figures are higher, but he cautioned against declaring a recovery.

"Many counties have seen an increase, but I would be very, very cautious about calling it any kind of trend," he said. "You have to look at the performance of the tax over a much longer period, probably closer to a year."

"Everybody wants to think that things are getting better. It's a natural reaction for all of us. We just have to be very, very cautious. We could have three or four months of increased revenues," McKinney said. "But we have to look at it month-to-month."

In addition to June, sales tax payments in May, April and February were higher than the same months last year, but in March and January, they were lower.

Total sales tax for 2009 was about $755,000 less than in 2008, and more than $1 million less than in 2007, the county's record year.

And while sales tax year-to-date is more than this time last year, it's about $187,000 less than this time in 2008 and $384,000 less than in 2007.

The Marion County Board of Commissioners asked departments to make cuts in two rounds last year, one a 6 percent cut midway through 2009 and another aiming for 20 percent less than the year before going into the 2010 budget.

At the beginning of the year, the county's general fund revenue was estimated to fall about $1 million short of the projected expenditures, which could leave the county with a $1 million carryover going into 2011.