The URL can be used to link to this page

Home My WebLink AboutFIN 2017-12-05 Item 2B - Report - 2017 3rd Quarter Sales Tax and Miscellaneous RevenueCity of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Peggy McCarthy, Finance Director BY: Lily Jue, Fiscal Coordinator CC: Mayor Ekberg DATE: December 5, 2017 SUBJECT: Sales Tax and Miscellaneous Revenue Report- 3rd Quarter 2017 Schedule I - Sales Tax in $1,000's Third quarter sales tax collections decreased by approximately $54K, or (1%) when compared with the same period in 2016. There was an increase in construction sales tax of $62K over the same quarter last year, or up by 19%. Sales tax from other industries decreased by $116K, or down by 3%. 11 2016 Actual 2017 Actual YOY Change -- Month -- Collect- i Construc-! Other i ! Total Construc-! Other ! i Total Construction ! ! Other• Industries ! Total i ed Recd tion i Industries i tion ! Industries i Amount % i Amount % i Amount % S i t Jan Mar $ 99 $ 1,190 $ 1,289 $ 123 $ 1,149 $ 1,272 $ 24 24% $ (41) -3%j $ (17) -1% Feb Apr 97 j 1,231 j 1,328 83 j 1,123 j 1,206 (14) -14% (108) -9%, (122) -9% Mar May 105 i 1,413 i 1,518 120 1,664 i 1,784 15 14%i 251 18%i 266 18% Q-1 Totals $ 301 j 3,834 j $ 4,135 $ 326 3,936 j $ 4,262 $ 25 8%i 102 3%i $ 127 3% Apr Jun 105 i 1,336 i 1,440 92 1,316 i 1,408 (13) -12%i (20) -1%i (33) -2% May Jul 119 i 1,361 i 1,480 106 i 1,315 i 1,421 (12) -10%i (46) -3%i (59) -4% Jun Aug 139 ! 1,553 ! 1,692 119 1,387 ! 1,506 (20) -14%! (166) -11%! (185) -11% Q-2 Totals $ 362 ! 4,250 ! $ 4,612 $ 317 ! 4,018 ! $ 4,335 $ (45) -12%! (232) -5%! $ (277) -6% Jul Sep 109 ! 1,428 ! 1,537 131 ! 1,376 ! 1,508 22 20%! (52) -4%! (30) -2% Aug Oct 111 ! 1,438 ! 1,549 126 1,345 ! 1,471 15 13% (93) -6% (78) -5% Sep Nov 115 ! 1,444 ! 1,559 140 ! 1,473 ! 1,613 25 22%! 29 2%! 54 3% Q-3 Totals $ 335 ! 4,310 ! $ 4,645 $ 397 ; 4,194 ! $ 4,591 $ 62 19%! (116) -3%! $ (54) -1% Oct Dec 143 ! 1,263 ! 1,406- - i - - - i - Nov Jan 126 1,368 1,494 - - - - i - Dec Feb 118 ; 1,852 ; 1,970 - - i- - - i - Q-4 Totals $ 386 4,484 j $ 4,870 $ - - i $ - $ - -i - -i $ - - Totals $ 1,385 i 16,878 i $ 18,262 $ 1,040 12,148 i $ 13,188 $ 42 i (246) i $ (204) Third quarter sales tax collections decreased by approximately $54K, or (1%) when compared with the same period in 2016. There was an increase in construction sales tax of $62K over the same quarter last year, or up by 19%. Sales tax from other industries decreased by $116K, or down by 3%. 11 INFORMATIONAL MEMO Page 2 Budget to Actual - Sales Tax in $1,000's Schedule I - Sales Tax Actual revenue from sales tax collections received through third quarter is less than anticipated by $1 million, or a 7% variance from budgeted estimates. Third quarter actual sales tax revenue from all the various industries in the categories of Manufacturing, Wholesale Trade, Retail Trade, Services and Miscellaneous have experienced a decrease, collectively, in sales tax collections by approximately $248K due primarily to reductions in reported gross sales activity. W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 12 2016 2017 Variance [Actual Over (Under) -- Allocated Original Month -- Actual Budget Actual Budget] Collect- ed Recd Amt % Jan Mar $ 1,289 $ 1,366 $ 1,272 (94) -7% Feb Apr 1,328 $ 1,407 1,206 (201) -14% Mar May 1,518 $ 1,609 1,784 175 11% 0-1 Totals $ 4,135 $ 4,382 $ 4,262 $ (120) -3% Apr Jun 1,440 $ 1,526 1,408 (119) -8% May Jul 1,480 $ 1,568 1,421 (147) -9% Jun Aug 1,692 $ 1,793 1,506 (286) -16% 42 Totals $ 4,612 $ 4,887 $ 4,335 $ (552) -11% Jul Sep 1,537 $ 1,629 1,508 (121) -7% Aug Oct 1,549 $ 1,642 1,471 (171) -10% Sep Nov 1,559 $ 1,652 1,613 (39) -2% 43 Totals $ 4,645 $ 4,923 $ 4,591 $ (331) -7% Oct Dec 1,406 $ 1,490 - - - Nov Jan 1,494 $ 1,583 - - - Dec Feb 1,970 $ 2,089 - - - Q-4 Totals $ 4,870 $ 5,162 $ - $ - - Totals $ 18,262 $ 19,352 $ 13,188 $ (1,003) Actual revenue from sales tax collections received through third quarter is less than anticipated by $1 million, or a 7% variance from budgeted estimates. Third quarter actual sales tax revenue from all the various industries in the categories of Manufacturing, Wholesale Trade, Retail Trade, Services and Miscellaneous have experienced a decrease, collectively, in sales tax collections by approximately $248K due primarily to reductions in reported gross sales activity. W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 12 INFORMATIONAL MEMO Page 3 Below is a graph of sales tax collections by type of industry showing annual change in revenue receipts from 2016 to 2017. $150,000 $100,000 $50,000 $(50,000) $(100,000) $(150,000) $(200,000) Construction $42.193 Change YTD by Category* Transportation/Warehousing 5668 ■ Manufacturing $(56,791) I Wholesale Trade $(146,155) Automotive $56,928 ■ Retail Trade $(105,988) 1 Services $(105,501) Miscellaneous $109,949 1 Total Construction increased by $42K, or up by 4% through third quarter. Construction of Buildings had an increase in sales tax activity of $42K, or up by 7.5%. Likewise, the area of Heavy & Civil Construction also experienced an increase in sales tax activity of $24K, or up by 41%, while the area of Specialty Trade Contractors had a decrease in sales tax activity of $24K, or down by 6%. The decrease of $57K, or (29%) in the Manufacturing category is mostly attributable to a reduction in sales tax activity for the Transportation Equipment Manufacturing area of $68K, or down by 77%. The continued overall decline of $146K, or a fall of nearly 15% in the Wholesale Trade category is due to a reduction in sales activity in the area of Wholesale Durable Goods of $143K which is down by 16% while the Automotive industry experienced an increase of $57K, or is up by 10% due to increased sales tax activity mainly in the area of Motor Vehicle & Parts Dealers. Total Retail Trade decreased by $106K, or fell by nearly 2% due primarily to a decline in sales tax activity for Electronics & Appliances of $93K, or down by 11%. While the area of Nonstore Retailers experienced an increase in sales tax activity of $77K, or up by 72%. The areas of Sporting Goods/Hobby/Books and General Mdse Stores are down by $50K and $58K, or have fallen by 12% and 4%, respectively. The Services category which shows a decrease of $105K, or down by 2.5% is mostly attributable to a collective decline in sales tax activity in the areas of Information, Finance & Insurance, Real Estate/Rental/Leasing and Health Care Social Assistance by $275K, or a decrease of 18%. However, the areas of Professional/Scientific/Technology, Administrative Support, Arts & Entertainment, Accommodation & Food Svcs, Public Administration, and Other Svcs are showing collective increases of $169K, or up by 6%. The miscellaneous category remains favorable through third quarter due primarily to the annual use tax filings in the Nonclassifiable Establishments related to artwork from earlier in the year. W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 13 INFORMATIONAL MEMO Page 4 Schedule II shows current year-to-date sales tax collected from the top ten industry classifications. Food Services/Drinking Places in the NAICS 722 category has the highest year over year increase at $81 K due to growth in overall gross sales over the same quarter previous year. This is followed by an increase of $55K in the category of Motor Vehicle & Parts Dealer, Construction of Buildings with an increase of $42K, and then Building Material & Garden by $40K during the current quarter due to overall increases in reported sales tax activity. Schedule II YTD YTD Dollar Group Name Current Prior Diff. Diff. 452 General Merchandise Stores $ 1,521,737 $ 1,579,747 $ (58,010) -3.67% 448 Clothing and Accessories $ 1,445,559 $ 1,460,601 $ (15,042) -1.03% 722 Food Services, Drinking Places $ 1,388,565 $ 1,307,450 $ 81,115 6.20% 443 Electronics and Appliances $ 754,936 $ 847,619 $ (92,683) -10.93% 423 Wholesale Trade, Durable Goods $ 729,926 $ 873,039 $ (143,113) -16.39% 236 Construction of Buildings $ 606,447 $ 564,015 $ 42,433 7.52% 444 Building Material and Garden $ 602,949 $ 562,956 $ 39,993 7.10% 441 Motor Vehicle and Parts Dealer $ 534,900 $ 479,810 $ 55,091 11.48% 721 Accommodation $ 517,003 $ 520,183 $ (3,180) -0.61% 453 Miscellaneous Store Retailers $ 515,893 $ 509,872 $ 6,021 1.18% Schedule III shows the ten largest declines in sales tax revenue by dollar difference for industries collected year-to-date. While the NAICS category 621 for Ambulatory Health Care Service experienced a current quarter decrease in sales tax collections of $164K, the NAICS category 336 for Transportation Equipment Manufacturing experienced a 77% decrease in sales tax activity over the previous year. Schedule III YTD YTD Dollar Group Name Current Prior Diff. Diff. 621 Ambulatory Health Care Service $ 64,870 $ 229,327 $ (164,457) -71.71% 423 Wholesale Trade, Durable Goods $ 729,926 $ 873,039 $ (143,113) -16.39% 443 Electronics and Appliances $ 754,936 $ 847,619 $ (92,683) -10.93% 336 Transportation Equipment Man $ 19,543 $ 87,430 $ (67,888) -77.65% 452 General Merchandise Stores $ 1,521,737 $ 1,579,747 $ (58,010) -3.67% 451 Sporting Goods, Hobby, Books $ 356,909 $ 407,224 $ (50,315) -12.36% 518 Internet Service Providers $ 23,963 $ 64,111 $ (40,148) -62.62% 517 Telecommunications $ 454,923 $ 484,952 $ (30,030) -6.19% 238 Specialty Trade Contractors $ 351,617 $ 375,619 $ (24,002) -6.39% 442 Furniture and Home Furnishings $ 324,405 $ 347,577 $ (23,172) -6.67% W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 14 INFORMATIONAL MEMO Page 5 The following charts show sales tax receipts the City collected from major industries from 2010 through third quarter of the current year. These categories include retail, services, wholesale, construction, and other consisting of manufacturing, transportation & warehousing, automotive, and miscellaneous. 52,600,000 $2,500,000 $2,400,000 $2,300,000 $2,200,000 $2,100,000 $2,000,000 $1,900,000 $1,800,000 $1,700,000 $1,600,000 $1,500,000 Retail 01 5700,000 $600,000 $500,000 5400,000 $300,000 5200,000 $100,000 5- Q2 Wholesale Q3 Q4 • 2010 • 2011 • 2012 • 2013 • 2014 • 2015 • 2016 • 2017 01 Q2 Q3 Q4 $600,000 5500,000 5400,000 5300,000 $200,000 $100,000 S . 010 • 2011 • 2012 • 2013 • 2016 • 2015 .2016 . 2012 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Services 01 02 Q3 Q4 • 2010 • 2011 . 2012 . 2013 • 2014 • 2015 •2016 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- Construction 01 02 Q3 Q4 ▪ 2010 . 2011 • 2012 . 2013 • 2010 • 2015 .3016 . 2017 Other -Mfg. Trnsp/Wrhsng, Automotive, & Misc. Q1 Q2 Q3 Q4 . 2010 . 2011 • 2012 . 2013 • 2016 • 2015 . 2016 • 2017 W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 15 INFORMATIONAL MEMO Page 6 Below is Schedule IV which shows quarterly gambling tax earned in 2017 compared to 2016. Schedule IV - Gambling Tax (a) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 950,379 $ 977,003 $ 989,745 Q2 867,047 983,322 902,961 Q3 927,316 951,991 965,727 Q4 934,269 - 972,968 $ 26,624 3% $ (12,742) -1% 116,276 13% 80,361 9% 24,675 3% (13,735) -1% Totals $ 3,679,011 $ 2,912,316 $ 3,831,400 $ 167,574 - $ 53,884 Gambling tax revenue for third quarter 2017 came in above the previous year by $25K, or up by 3%. As a result, overall year-to-date gambling tax revenue is up by a total of $168K, or has increased nearly 7% when compared with 2016 and has exceeded year-to-date allocated budget by nearly $54K, or up by approximately 2%. Casinos within the City continue to do well. Schedule V shows monthly admissions tax receipts for the prior year and current year to date. Schedule V - Admissions Tax (b) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 161,269 $ 166,003 $ 178,187 Q2 156,588 157,574 173,014 Q3 157,862 117,422 174,422 Q4 157,821 - 174,377 Totals $ 633,540 $ 440,999 $ 700,000 $ 4,734 986 (40,440) 3% $ (12,183) 1% (15,441) -26% (57,000) -7% -9% -33% $ (34,720) - $ (84,624) - Third quarter 2017 admissions tax revenue received was $40K, or 26% less than previous year same quarter actual due to a taxpayer reporting less gross sales activity during the months of August and September than anticipated. As a result, total year-to-date revenue is down by nearly $35K, or approximately 7% lower than 2016. Schedule VI shows monthly telecommunications utility tax receipts for 2017 compared to 2016. Schedule VI - Telecommunications Utility Tax (°) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 348,156 $ 323,708 $ 339,620 Q2 321,852 312,456 313,961 Q3 317,156 388,433 309,380 Q4 343,515 335,093 Totals $ 1,330,679 $ 1,024,597 $ 1,298,053 $ (24,448) -7% $ (15,912) -5% (9,397) -3% (1,505) 0% 71,278 22% 79,053 26% $ 37,433 - $ 61,636 - Current third quarter 2017 telecommunications utility tax received was $71K, or 22% more than previous year same quarter actual. This is due to a taxpayer who filed returns from prior years of $80K on behalf of their merger company. As a result, total year-to-date revenue is up by $37K, or has increased by 4%. (a) (b) (c) (d) Gambling tax currently includes card games, punch boards, pull tabs, and amusement games. Excludes golf course admissions tax. Telecommunications Utility tax currently includes cellular, pager and telephone usage. Actuals reflected in Schedules IV, V and VI are amounts earned for the quarter. W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 16 INFORMATIONAL MEMO Page 7 See attached Sales Tax Summary Main Chart — 3rd Qtr 2017 W:1FIN Projects\Sales Tax Information120171Info Memo Sales Tax -2017-Q3 2017MEMO (Dec 2017).docx 17 18 as 1- 22 1- i 2 cs m 0 Z r N 5 10 � m WM c0 co C asE me - :Eco m OZ20 0 ci ae 3 J es 0 cc cc Ul P7 1� fO m N O t7 N t. O CD N cs r a c- N m o . (pp. DI r m A A m N Q m r m)GEga 0))9)9cpg O t(� COCOO f� r "{p N a/1 O N N n m d of me 12 aee ae o1 3! Ce an d L, M G, aQ u) a O z. Q O E tD V N M Ol E r^ n g m L m R@ E MO x-—" 2 2 N 00 Of I o M ,,, «. d gO a 0 g« y L+) u1 .o m cc 0o <o N W 0 N 4 RE xxx�r?5x?Sx?5 «0U4 2 I (0 u) a0 t0 N. r m O) e e ae m ae .e ae o < ..� a0 a' OJ• O O in N ae oQ ae ae N ae a s W cc W r E on LV 7 Q FF IMISCIEI..AN IEOUS O c 0 ,0,2= m 0) m ae ae• ae ae.e ae :e us oth °R cd wo gt N ae v CV C I fraud Tole/ IChiin 444 41 m ^ ^i ^ p �+i C7 r 1l) C7 1� ^i Q! A N N � m - 10 CONSTRUCTION e r d r a t0 ggM t0 J 0 Jam 1- 0 2 U. H 3 2 coco w 12 r cQ CO g O CO 0 0 m r m LI 0g27�.. en t0 N 00 m N O O ea Ea n 5R gl Eg a cm N C O N cu F •t0 O T Lf1 t00. 1p 5 m r m N N - ..: OJ c o - d r ' gi d e N 5, 2 m QC «0 ago, c it - . -j2 m,cs Z G 13 7r ta -Er 21 o riso+m m ¢ cLnV c a � 5 g f-�, s 71 2L 42 0 $'5 3 5 s m li, w m s W g .,ie.0: ¢ 4¢ies o''�p -od T , QzQ tO 92 s a t aitl - 5 m 0 E m r r m E 2 n 0 w a, m a c R .c " c i `rs s- R Q -§ m f l Rq[} R m F C m FF$1 A F 3~ LL m H~¢ J 3: ac a O d z d �LL U W F- li i' F 10 Q fliANSPORTAfION &WAREHOUSING g " a r X IO o [G t0 N m t0 O CD m r DI a4 N r a 0 to WHI )LES ALE TRADE m 0 R r M. LO N 3i 19