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Home My WebLink AboutFIN 2017-04-04 Item 2C - Report - 2016 4th Quarter: Sales Tax and Miscellaneous RevenueCity of Tukwila Allan Ekberg, Mayor TO: Mayor Ekberg Finance Committee FROM: Peggy McCarthy, Finance Director BY: Li|vJum' Fiscal Coordinator DATE: March 29, 2017 SUBJECT: Sales Tax and Miscellaneous Revenue Report — 4th Quarter 201G Schedule I - Sales Tax in $1,000's Fourth quarter sales tax collections was down approximately $197K(4%) when compared with the same period iD2015. There was o notable decline ($293Knr696)in sales tax collections from other industries, while Construction tax revenue was up $96K (33%) during the same period. When reviewing the entire year, annual sales tax co|ksoUonS was down $401K (296) overall compared with 2015 Although construction experienced a $126K (10%) gain over 2015, other industries were down $528K(3%) for the year. � � 2015 Actual 2016 Actual YOY Change Other -- Month Other Total Other Total Construction Industries Total Fourth quarter sales tax collections was down approximately $197K(4%) when compared with the same period iD2015. There was o notable decline ($293Knr696)in sales tax collections from other industries, while Construction tax revenue was up $96K (33%) during the same period. When reviewing the entire year, annual sales tax co|ksoUonS was down $401K (296) overall compared with 2015 Although construction experienced a $126K (10%) gain over 2015, other industries were down $528K(3%) for the year. � � INFORMATIONAL MEMO Page 2 Budget to Actual - Sales Tax in $1,000's Schedule I - Sales Tax While the fourth quarter sales tax came in slightly below budget for the quarter, the 2016 actual sales tax collections came in $308K (2 %) above the amended budget for the year. WAFIN Projects \Sales Tax Information\2016 \Info Memo Sales Tax - 2016 -Q4 2016MEMO (Mar 2017).docx I l�J 2015 2016 Variance [Actual Over (Under) Amended - Month - Budget] Collect- Original Amended ed Rec'd I Actual Budget Budget Actual I Amt % Jan Mar $ 1,280 $ 1,162 $ 1,231 $ 1,289 58 5% Feb Apr 1,313 $ 1,193 $ 1,263 1,328 65 5% Mar May 1,462 $ 1,328 $ 1,406 1,518 112 8% Q -1 Totals $ 4,055 $ 3,683 $ 3,900 $ 4,135 $ 235 6% Apr Jun 1,319 $ 1,198 $ 1,269 1,440 171 14% May Jul 1,544 $ 1,403 $ 1,486 1,480 (6) 0% Jun Aug 1,762 $ 1,601 $ 1,695 1,692 4 0% Q -2 Totals $ 4,626 $ 4,202 $ 4,450 $ 4,612 $ 162 4% Jul Sep 1,748 $ 1,588 $ 1,681 1,537 (144) -9% Aug Oct 1,596 $ 1,450 $ 1,535 1,549 14 1% Sep Nov 1,572 $ 1,428 $ 1,513 1,559 47 3% Q -3 Totals $ 4,916 $ 4,466 $ 4,729 $ 4,645 $ 83 -2% Oct Dec 1,507 $ 1,369 $ 1,450 1,406 (45) -3% Nov Jan 1,469 $ 1,334 $ 1,413 1,494 81 6% Dec Feb 2,092 $ 1,901 $ 2,012 1,970 42 -2% Q-4 Totalsj $ 5,067 $ 4,604 $ 4,875 $ 4,870 1 $ 5 0% Totals $ 18,664 $ 16,954 $ 17,954 $ 18,262 $ 308 2% While the fourth quarter sales tax came in slightly below budget for the quarter, the 2016 actual sales tax collections came in $308K (2 %) above the amended budget for the year. WAFIN Projects \Sales Tax Information\2016 \Info Memo Sales Tax - 2016 -Q4 2016MEMO (Mar 2017).docx I l�J INFORMATIONAL MEMO Page Below is a graph of sales tax collections by type of industry showing annual change in revenue receipts from 2015 to 2010. % Change YTD by Category* $400,00 $200,000 — -� - — Construction Trans norm^nn/wo'mvusing �z 867 Manufacturing *npm $(200,000) � $(*00,000) - � �w��»� | � ' � WholesaleTracle � $m0(),000) � � � _ RetaxTrade po�z33 Services� � tzuom --� ---�� Automotive $(6,440) w.,"u/""eo., Total Construction including all categories was up nearly $126K (10%) for the year. The increase in Construction occured primarily within the Specialty Trade Contractors which grew by 51 % over 2015. Both the Manufacturing and Transportation/Warehousing industries have been relatively stable throughout the year, with a 4% decrease and 5% increase respectively. The overall decline of $732K (3696) in the Wholesale Trade category is mostly attributable to Wholesale Trade in Durable Goods which is down 3996 from 2015 to 2016. The Automotive category remained steady compared tO2U15,with a minor reduction Of less than 196. The overall increase of $199K C2%J in the Retail Trade category is due primarily to additional sales activity in Electronics Q Appliances (up $141K). Miscellaneous 8h}ne Retailers (up $79K). and Building K0otmri8|a (up $50K). The largest decline in individual Retail Trade categories occurred in Clothing & Accessories (down $42K) and Sporting Goods (down $34K). Of the total $129K (2%) increase in the Services industry, there were combined increases totaling over $199K in the categories of: Professional/Technology, Real Estate/Rental/Leasing, AdminiStrodv8/GuppnrtServiCeo. and Accommodation & Food Services. The remaining Service categories decreased, including a 5896 reduction in Educational Services. WARN projactu�Salev Tax |nmrmation\2o1mmfo Memo Sales mx-2n10-Q*zo1*msmo (Mar 2017),dvcx INFORMATIONAL MEMO Page 4 The miscellaneous category decreased almost $194K (36 %), with the bulk of the reduction in "Unclassifiable Establishments ". The Unclassifiable Establishments include those taxpayers who report use taxes to a special trust account under NAICS code 999. In 2015, there was a large taxable amount of $14.3 million reported in this category, whereas in 2016 there was a decrease in reported taxable gross revenue. Schedule 11 shows the year -to -date sales tax from the top ten industry classifications. Schedule II Schedule III shows the ten largest declines in sales tax revenue by industry. Schedule III YTD YTD Dollar % Group Name Current Prior Diff. Diff. 452 General Merchandise Stores $ 2,202,157.84 $ 2,207,293.04 $ (5,135) -0.23% 448 Clothing and Accessories $ 2,089,127.80 $ 2,131,139.85 $ (42,012) -1.97% 722 Food Services, Drinking Places $ 1,751,724.19 $ 1,703,851.32 $ 47,873 2.81% 443 Bectronics and Appliances $ 1,186,063.37 $ 1,044,411.78 $ 141,652 13.56% 423 Wholesale Trade, Durable Goods $ 1,133,844.18 $ 1,865,923.60 $ (732,079) - 39.23% 236 Construction of Buildings $ 760,330.38 $ 816,754.90 $ (56,425) -6.91% 444 Building Material and Garden $ 733,915.17 $ 683,498.44 $ 50,417 7.38% 453 Miscellaneous Store Retailers $ 723,332.78 $ 644,085.95 $ 79,247 12.30% 517 Telecommunications $ 679,505.14 $ 722,638.49 $ (43,133) -5.97% 441 Motor Vehicle and Parts Dealer $ 654,978.83 $ 661,297.34 $ (6,319) -0.96% Schedule III shows the ten largest declines in sales tax revenue by industry. Schedule III KTIN Projects\Sales Tax Information1201611nfo Memo Sales Tax- 2016 -Q4 2016MEMO (Mar 2017).docx 12 YTD YTD Dollar % Group Name Current Prior Diff. Diff. 423 Wholesale Trade, Durable Goods $ 1,133,844.18 $ 1,865,923.60 $ (732,079) - 39.23% 999 Nonclassifiable Establishments $ 193,069.02 $ 300,915.25 $ (107,846) - 35.84% 236 Construction of Buildings $ 760,330.38 $ 816,754.90 $ (56,425) -6.91% 517 Telecommunications $ 679,505.14 $ 722,638.49 $ (43,133) -5.97% 448 Clothing and Accessories $ 2,089,127.80 $ 2,131,139.85 $ (42,012) -1.97% 451 Sporting Goods, Hobby, Books $ 573,122.56 $ 607,399.23 $ (34,277) -5.64% 454 Nonstore Retailers $ 188,161.73 $ 217,703.87 $ (29,542) - 13.57% 532 Rental and Leasing Services $ 591,84424 $ 613,779.89 $ (21,936) -3.57% 522 Credit Intermediation $ 103,796.53 $ 120,189.92 $ (16,393) - 13.64% 611 Educational Services $ 11,319.81 $ 25,644.75 $ (14,325) - 55.86% KTIN Projects\Sales Tax Information1201611nfo Memo Sales Tax- 2016 -Q4 2016MEMO (Mar 2017).docx 12 INFORMATIONAL MEMO Page 5 The following charts show sales tax receipts the City collected from major industries from 2010 through 2016. These categories include retail, services, wholesale, construction, and other consisting of manufacturing, transportation & warehousing, automotive, and miscellaneous. Retail Services $1'wowoo 51.200,000 $1,ow,wo $60[)'000 S400,000 $20CM)DO Q 1 (12 Q3 Q4 Construction WARN Projects\Sales Tax Information016\1nfo Memo Sales Tax-2016-Q4 2016MEMO (Mar 2017).docx 13 INFORMATIONAL MEMO Page 6 Below is Schedule IV which shows quarterly gambling tax earned in 2016 compared to 2015. Schedule IV - Gambling Tax (a) (d) 2016 INCREASE (DECREASE) Quarter 2015 2016 Allocated YEAR OVER YEAR BUDGET VARIANCE Earned Actual Actual Budget Amount % Amount % Q1 $ 698,773 $ 950,379 $ 781,676 $ 251,606 36% $ 168,703 22% Q2 679,484 867,047 760,098 187,562 28% 106,948 14% Q3 677,923 927,316 758,352 249,393 37% 168,964 22% Q4 743,365 934,269 831,558 190,905 26% 102,711 12% Totals $ 2,799,545 $ 3,679,011 $ 3,131,684 $ 879,466 31% $ 547,327 17% Gambling tax revenue for 2016 exceeded the budget estimate by over $547K (17 %). Gambling tax revenue was also nearly $900K (31%) higher than 2015. Casinos within the City continue to exceed expectations. Schedule V shows monthly admissions tax receipts for the prior year and current year to date. Schedule V - Admissions Tax (b) (d) 2016 INCREASE (DECREASE) Quarter 2015 2016 Allocated YEAR OVER YEAR BUDGET VARIANCE Earned Actual Actual Budget Amount % Amount % Q1 $ 129,245 $ 161,269 $ 135,169 $ 32,024 25% $ 26,100 19% Q2 171,745 156,588 179,617 (15,157) -9% (23,029) -13% Q3 159,808 157,862 167,133 (1,946) -1% (9,271) -6% Q4 166,452 157,821 174,081 8,631) -5% 16,260 -9% Totals $ 627,250 $ 633,540 $ 656,000 $ 6,290 1% $ (22,460) -3% While 2016 admissions tax revenue received was $22K (3 %) less than budgeted projections, the 2016 total revenue was $6K (1 %) higher than 2015. Schedule VI shows monthly telecommunications utility tax receipts for 2016 compared to 2015. Schedule VI - Telecommunications Utility Tax (`) (d) 2016 INCREASE (DECREASE) Quarter 2015 2016 Allocated YEAR OVER YEAR BUDGET VARIANCE Earned Actual Actual Budget Amount % Amount % Q1 $ 317,991 $ 348,156 $ 311,176 $ 30,166 9% $ 36,980 12% Q2 349,024 321,852 341,544 (27,172) -8% (19,692) -6% Q3 327,197 317,156 320,185 (10, 041) -3% (3,029) -1% Q4 319,135 343,515 312,295 24,379 8% 31,219 10% Totals $ 1,313,347 $ 1,330,679 $ 1,285,200 1 $ 17,332 1% $ 45,479 4% Telecommunications utility tax ended 2016 at $45K (4 %) higher than budget. In addition, this tax revenue was $17K (1 %) higher than 2015. (a) Gambling tax currently includes card games, punch boards, pull tabs, and amusement games. (b) Excludes golf course admissions tax. (°) Telecommunications Utility tax currently includes cellular, pager and telephone usage. (d) Actuals reflected in Schedules IV, V and VI are amounts earned through fourth quarter 2016. WAFIN Projects\Sales Tax Inform ation1201Hnfo Memo Sales Tax - 2016 -Q4 2016MEMO (Mar 2017).docx 14