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Home My WebLink AboutFIN 2019-01-28 Item 2D - Report - 2018 3rd Quarter Sales Tax and Miscellaneous RevenueCity of Tukwila Allan Ekberg, Mayor INFOR ATIONAL E ORANDU TO: Finance Committee FROM: Peggy McCarthy, Finance Director BY: Aaron Williams, Fiscal Coordinator CC: Mayor Ekberg DATE: January 23, 2019 SUBJECT: Sales Tax and Miscellaneous Revenue Report- 3rd Quarter 2018 chedule I - Sales Tax in $1,000s 2017 Actual 2018 Actual YOY Change 1 ! ! 1 , ! i Other ---- Month ---- 1 Other 1 Total ! Other ! Total Construction ! Industries ! Total Collect- ed Rec'd Construc-j j ;Industries; ton ; Construct tion !Industries ; Amount % ;Amoun 1 t % ; ; Amount % Jan Mar $ 123 1 $ 1,149 j $ 1,272 $ 116 j $ 1,222 j $ 1,339 $ (6) -5%j $ 73 6%j $ 67 5% Feb Apr 83 1 1,123 j 1,206 128 j 1,211 j 1,338 45 54%j 88 8%j 132 11% Mar May 120 i 1,664 i 1,784 131 i 1,487 i 1,618 11 9%i (177) -11%i (166) -9% Q-1 Totals $ 326 ; 3,936 ; $ 4,262 $ 375 ; 3,920 ; $ 4,295 $ 49 15%; (16) 0%; $ 33 1% Apr Jun 92 ! 1,316 ! 1,408 122 ! 1,349 ! 1,471 31 33%! 33 2%! 64 5% May Jul 106 ! 1,315 ! 1,421 134 ! 1,492 ! 1,626 28 27%! 177 13%! 205 14% Jun Aug 119 1 1,387 I 1,506 139 I 1,682 I 1,821 20 17%! 295 21%l 315 21% Q-2 Totals $ 317 1 4,018 1 $ 4,335 $ 395 j 4,524 I $ 4,919 $ 79 25%j 505 13%i $ 584 1 % Jul Sep 131 j 1,376 j 1,508 136 j 1,678 j 1,814 5 4%j 302 22%j 307 20% Aug Oct 126 j 1,345 j 1,471 124 j 1,682 j 1,805 (2) -2%j 337 25%j 335 23% Sep Nov 140 i 1,473 i 1,613 163 i 1,619 ! 1,782 23 16%i 146 10%1 169 10% Q-3 Totals $ 397 ; 4,194 ; $ 4,591 $ 423 ; 4,979 ; $ 5,402 $ 26 7%; 785 19%; $ 811 18% 1 1 i i i Oct Dec 144 ; 1,329 ; 1,473 . - Nov Jan 110 ! 1,424 ! 1,534 ! i - j I Dec Feb 120 I 1,849 ! 1,969 ! ! - I I Q-4 Totals $ 374 i 4,602 i $ 4,976 - I - 1 $ - $ - 0%i - 0%i - 0% Totals $ 1,414 j 16,750 j $ 18,164 $ 1,194 13423 j $ 14616 $ 154 11%j 1,274 8%j $ 1,428 8% Third Quarter sales tax collections were $811 thousand or 18% more than the same period in 2017. Of the $811 thousand increase over the prior year, Construction related sales tax made up $26 thousand while all other industries accounted for an increase of $785 thousand. Year -to -Date through the third quarter 2018, sales tax collections are $1.4 million or 8% more than the first three quarters of the prior year collections. If this trend continues through the fourth quarter, annual collections are expected to finish the year just over $19.6 million. 15 INFORMATIONAL MEMO Page 2 Budget to Actual - Sales Tax in $1,000's Schedule I -Sales Tax in $1,000's - _Month - Actual Allocated Actual Collected ' Rec'd Budget Amt 96 Jan Mar $ 1.272 $ 1.308 $ 1.330 (57) -4% Feb Apr 1.206 $ 1.323 $ 1.338 15 196 K8or May 1.784 $ 1.968 $ 1.618 (340) 47Y6 Q-1 Totals $ 4,262 $ 4,677 $ 4,295 $ (382) -896 Apr Jun 1.408 $ 1.545 1.471 (74) '596 May Jul 1.421 $ 1.559 1.628 67 4% Jun Aug 1.506 $ 1.653 1.821 168 1098 0_2Tbbe|a $ 4,335. '$ 4,757 $ 4,919 $ 162 3% Jul Sep 1.508 $ 1.654 1.814 160 1096 Aug Oct 1,471 $ 1,614 1.805 192 1296 Sep Nov 1,613 $ 1,770 1.782 12 196 Q-3Toba|s $ 4,581 $ . 5,038 .$ 5.402 $ 384 7% . Oct Dec 1.473 $ 1.617 Nov Jam 1.534 $ 1.883 Dec Feb 1.969 $ 2.161 Q4Totm|m $ 4'976 $ 5.461 $ ~ $ - U% Actual no|en tax collected in the third quarter was $384 thousand greater than anUdPmted, representing e 796 positive variance from budget. Overall year-to-date sales tax collection through the third quarter was $144 thousand above budget, which is 1 % positive variance from budget expectations. ituncKAgenda homnTinanceU28.18\110 Memo Sales Tax-x018-W.dmz INFORMATIONAL MEMO Page 3 Below is a graph of the year-to-date changes in sales tax collections by industry type year over year. $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $(100,000) $(200,000) $(300,000) Change YTD by Category Automotive $584,067 Constructi on $153,888 Manufacturing $61,982 Whol esa I e Tra de $122,098 Tra ns port / Warehousing $(3,874) Services $533,462 Retail Trade $189,951 Miscellaneous $(213,586) All industry categories show an increase in sales tax except for transportation/warehousing, which had a slight decline of $3,874 when compared to the prior year. The miscellaneous category contains sales tax from periodic and one-time type transactions. Adjusting for the one-time transaction in the miscellaneous category, year -over - year sales tax through the 3rd quarter 2018 increased by $1.64 million. As the chart above shows, there are two categories that account for more than $1 million of this year -over -year increase. Automotive sales tax is primarily being boosted by a bus manufacturer that, in the past 5 months, has contributed approximately $638 thousand. Within the Services category multiple groups have contributed to this growth, indicating that the sector is growing as opposed to just one taxpayer/business. Z:\Council Agenda ItemsTinance11.28.191Info Memo Sales Tax-2018-Q3.doex 17 INFORMATIONAL MEMO Page 4 Schedule U nhovva year-to-date sales tax collections from the top ten industry classifications. Schedule 11 - YTD sales tax collections - top ten industry classifications YTD YTO Dollar Y6 Group Name Current Prior Oiff. Diff. 452 General Merchandise Stores $ 1^560,561 $ 1.521,737 $ 38,824 2.55% 722 Food Services, Drinking Places $ 1,481,880 $ 1,388,565 $ 108,321 7.44% 448 Clothing and Accessories $ 1,484547 $ 1^445,559 $ 38,889 2.70% 441 Motor Vehicle and Parts Dealer $ 1.114.040 $ 534.900 $ 579.140 108.27% 423 Wholesale Trade, Durable Goods $ 839.292 $ 729,926 $ 108,368 14.9896 236 Construction ofBuildings $ 758.597 $ 606.447 $ 152.150 25D9Y6 443 Electronics and Appliances $ 750.716 $ 754,930 $ (4.220) '0.50Y6 444 Building Material and Garden $ 619.544 * 602.949 $ 16.595 2.75% 453 Miscellaneous Store Retailers $ 572.837 $ 515.893 $ 56.944 11.04% 721 Accommodation $ 566,937 $ 517.003 $ 49.933 9.86Y6 The top ten industries remain relatively stable with 721-Accommodation replacing 517-Telecommunications in the last spot onthe list. The group with the greatest gains this year iothe 441-Motor Vehicles, which ismore than double the prior year primarily driven sales from abus manufacturer. The top three categories continue to be strong, posting positive growth compared to the prior year performances. These groups provide stability to the retail sales tax collection contributing more than 30% of all sales tax collections for the city. f8ounci| 28.19V* Memo Sales Tax-2018-0,docx INFORMATIONAL MEMO Page 5 Schedule III shows the year-to-date ten largest declines insales tax collections bydollar difference b«industry Schedule III -YTDten largest declines($) in salestax collectionsby industry class YTO YTO Dollar Y6 Group Name Current Prior Qiff. [hff. ygA NnncaoeifiobleEotabishmente $ 70,032 $ 283,839 $ (213,807) -7533m 454 NonatonaReba|ero $ 120.574 $ 184.336 $ (63762) -34.59% 237 Heavy and {]\A|ConotmcUnn $ 49,523 $ 81.669 $ (32.147) -39.36% 621 Ambulatory Health CereGerice * 37.922 $ 64,870 * (26.e40) '41`54Y6 488 Transportation Support $ 25.769 $ 39.305 $ (13.535) '34.44`& 446 Health and Personal Care Store $ 199.135 * 212.365 $ (13.230) 'n.uo% 323 Printing and Related Support $ 14.916 $ 20.872 m (5.950 -28.54% 515 Broadcasting (except Internet) $ 3.926 $ 8`773 $ (4.847) '55.25% 443 Electronics and Appliances $' 750.716 $ 754.936 $ (4`220) '0.56% 611 Educational Services $ 4,531 $ 8.617 $ (4.085) '*7,*1% The largest decline was in the industry category (m|am referred to as the miscellaneous oatmoo,v).which reflects alarge art related transaction inthe prior year. Notrends were detected when analyzing these groups compared toprior periods. VCouncil Agenda 1temokFinammU.2819k1nfoMemo Sales Tax-201043dnu 19 INFORMATIONAL MEMO Page 6 SALES TAX SUMMARY I Ili 2018 (Received in March 2018 - Nover NAICS CONSTRUCTION 236 Construction of Buildings 237 Heavy & Civil Construction 238 Specialty Trade Contractors 17 TOTAL 844,136 107, 260 17YTD 18YT0 606,447 758,597 81,669 49,523 462,376 351,617 385,502 YTD % Diff 25.1 % -39.4% 9.6% TOTAL CONSTRUCTION $ 1,413,773 $ 1,039,734 $ ::1,193,622 Overall Construction Change from Previous Year $ 153,888 14,8% MANUFACTURING 17 TOTAL 17 YTD 311 Food Manufacturing 10,703. 312 Beverage & Tobacco Products 11,960 313 Textile Mills 409 314 Textile Product Mills 14,792 315 Apparel Manufacturing 888 316 Leather & Allied Products 88 321 Wood Product Manufacturing 3,740 322 Paper Manufacturing 24,646 323 Printing & Related Support 28,490 324 Petroleum & Coal Products 41 325. Chemical Manufacturing -15,834 326 Plastic & Rubber Products 3,955 327 Nonmetallic Mineral Products 5,081 331 Primary Metal Manufacturing 1,803 332. Fabricated Metal Mfg Products 8,752. 333 Machinery Manufacturing 6,300 334 Computer& Electronic Products 10,531 335 Electric. Equipment Appliances 3,949 336. Transportation Equipment Mfg 29,297 337 Fumiture & Related Products 8,432 339 MiscellaneousManufacturing19,765 TOTAL MANUFACTURING. $ 177,788 $ 140,081 $ Overall Manufacturing Change from Previous Year TRANSPORTATION & WAREHOUSING 481 Air Transportation 482 Rail Transportation 483 Water Transportation 484 Truck Transportation 485 Transit and Ground Passengers 487 Scenic and Sightseeing Tran 488 Transportation Support 491. Postal Services 492 Couriers & Messengers 493 Warehousing & Storage TOTAL TRANSP & WHSING $ Overall Transportation Change 17 TOTAL 11 169 86 1,852 395 57 47,071 816 1,600 1,878 53,936 $ from Previous Year 8,891 8,876 366 10,154 686 53 2,709 18,257 20,872 19 1,873 3,157 3,446 1,213 5,931 3,544 7,877 2,960 19,543 7,549 12,107 17 YTD 11 97 61 1,380 151 18 YTD 18,877 8,874 201 10,100 357 32 2,320" 18,826 14,916` 73 4,324 4,641 2 919 7,999 6,033 19,771 11,734 41,940 7,754 19,417 202,063`s $61,982 44.2% 18 YTD' 0 1 17 1,282 452 6 57 7,291 39,305 25,769 673 782 1,413 1,563 1,332 1,799 44,479 $ 40,605 ($3,874) WHOLESALE TRADE 17 TOTAL 17 YTD 423 Whis Trade -Durable Goods. 1,016,477 729,926 424 Whls Trade -Nondurable -Goods 155,695 118,357 425 Wholesale Electronic Markets 2,6961,883 2,282 WHOLESALE TRADE TOTAL $ 1,176,868 $ 850,166 $ 972,264 Overall Wholesale Change from Previous Year $122,098 18YT0 839,292 130,690 YTD % Diff 112.3% 0.0% -45.1% -0.5% 48.0 % -38.5% -14.3% 3.1 % -28.5% 280.2% 130.9% 47.0% -14.3% -24.2% 34.9% 70.2% 151.0% 296.5% 114.6% 2.7% 60.4% YTD % Diff 0.0% -48.1% 2568.8% -7.1% 200.0% 12613.5% -34.4% 16.2% 10.6 % 35.1% -8.7% YTD % Diff 15.0% 10.4% 21.2% NAICS. AUTOMOTIVE 17 TOTAL 17 YTD 18:YT0 441 Motor Vehicle & Parts Dealer 709,541 534,900 1,114,040 447 Gasoline Stations 91,039 68,920 73,847 TOTAL AUTOMOTIVE $ 800,581 $ 603,820 $ 1,187,887 Overall AutomotiveChange from Previous Year $584,067 ` 96.7% NAICS RETAIL TRADE 442 Fumiture & Home Furnishings 443 Electronics & Appliances 444 Building Material &Garden 445 Food & Beverage Stores. 446 Health & Personal Care 448 Clothing & Accessories 451 Sporting Goods, Hobby, Books 452. General Merchandise :Stores. 453 Miscellaneous Store Retailers 454 NonstoreRetailers TOTAL RETAIL TRADE $ Overall General Retail Change from Previous Year SERVICES 17 TOTAL 18 YTD 445,454 371,858 1,168,189 750,716 805,251 619,544 257,762 224;869 298,682 199,135 2,066,870 1,484,547 533,560 391,519 2,131,267 1,521,737 1,560,561 738,487 515,893 572,837 248,748 184,336 120,574 8,694,271 $ 6,106,210 $ 6,296,160. $189,951 3.1% 17 YTD 324,405 754,936 602,949 187,119 212,365 1,445,559 356,909 17 TOTAL 17 YTD 51X Information 820,832 52X Finance & Insurance 106,045 53X Real Estate, Rental, Leasing 623,983 541 Professional, Scientific, Tech 547,039 551 Company Management 9 56X Admin, Supp, Remed Svcs 170,046 611 Educational Services. 10,355 62X Health Care Social Assistance 119,513 71X Arts & Entertainment 256,620 72X .Accommodation & Food Svcs 2,536,470 81X Other Services 270,882 92X Public Administration 87,143 TOTAL SERVICES $ 5,548,937 $ 4,119,365 $ 4,652,827 Overall Services Change from Previous Year $533,462: 13.0% YTD %Diff 108.3% 7.1% % Diff 14.6% -0.6% 2.8% 20.2% 2.7% 9.7% 2.6% 11.0% -34.6% MISCELLANEOUS 18YT0 580,066 680,664 76,701 99,301 454,951 486,448 412,456 528,657 0 1 121,094 237,409 8,617 4,531 92,427 63,746 201,276 231,899 1,905,568 2,058,823 197,986 192,910 68,223 68,438 17 TOTAL 17 YTD 000 Unknown 0 111-115 Agriculture, Forestry, Fishing 211.221 Mining &Utilities 999 Unclassifiable Establishments MISCELLANEOUS TOTAL $ Overall Miscellaneous: Change from Previous Year 0 382 351 1,089 547 296,439 283,839 :70,032. 298,074 $ 284,572 $ 70,985 (6213,586) -75.1% YTD % Diff 17.3% 29.5% 6.9% 28.2% 0.0% 96.1% -47.4% -31.0% 15.2% 8.0% -2.6 % 0.3% Y7D 0 474 479 YTD % Diff 0.0% 24.0% 36.6% -75.3% YTD 17 TOTAL 17 YTD 18 YTD Diff GRAND TOTALS 518,164,227. 613,188,426. 514,616,413 Grand Total Change from Previous Year :$1,427,987 10.83% 14.4% Grand Total. Change. from Previous Year - Without New Construction $1,274,099 10.49%' 2bouncil Agenda Items\Finance11.28.191Info Memo Sales Tax-2018-Q3.docx INFORMATIONAL MEMO Page 7 Schedule 0V ahovva quarterly gambling tax performance year over year and for the current year compared tobudget. Schedule IV - Gambling Tax (a) (d) 2018 Quarter 2017 2018 Allocated Earned Actual Actual Budget D1 $ 977003 $ 988.421 $ 985.831 Q2 983.322 841.104 1,002.272 C>3 951,981 885.439 970.337 O4 958.503 876.974 INCREASE(DECREASE) YEAR OVER YEAR BUDGETVARLANCE Amount % Amount % 11.418 196 $ (7,410) '11% (142.218) '14Y6 (161,168) 46% Totals $' 3,870,819 $ 2,814,96$ 3,945,414 $ (97,352) -3% $ (153,476) -4% During the third quarter Gambling tax revenue was 4Y6above the same period of the prior year and296 greater than budget expectations. The City has four casinos — the Riverside Inn, the Great American, the Fortune and the Macau. Ananalysis ofthe third quarter gambling taxes show that, after the decline in the second quarter, the gambling revenue has bounced back to expected levels in the third quarter. While still anticipated to come in under bUdget, the variance is primarily a result ofsecond quarter underperfornlmnce. Gambling tax isbudgeted toincrease by296over 2D17actual revenue. Schedule Voho««o quarterly admissions tax performance year over year and for the current year compared tObudget. (d) 2018 Quarter 2017 2018 Allocated Earned Actual Actual Budget INCREASE(DECREASE) YEAR OVER YEAR BUDGETVARV\NCE Amount % Amount ^& Q1 $ 16I003 $ 206037 $ 176,211 Q2 157.574 249.086 167.263 O3 177.422 281.591 188.331 O4 171.641 182`185 $ 40,034 24% $ 29,827 17% 91,522 58% 81.833 49Y6 Admissions tax has continued tobestrong through the third quarter of2O18.During the third quarter, the City recognized $73 thousand of admission tax revenue for past due taxes from a business that had not paid taxes since opening in3O15.The business will remit the past due amounts hfseven payments, NoV`18-K88y'19. Z:kCouncil Agenda ltems\Financek1.28.19\lm�Memo Sales ��Q3.docx 21 INFORMATIONAL MEMO Page 8 Schedule VI shows quarterly telecommunications utility tax performance year over year and for the current year compared to budget. Schedule VI - Telecommunications Utility Tax (c) (d) 2018 Quarter 2017 2018 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount %a Amount Q1 $ 323,708 $ 292,954 $ 319,585 Q2 312,456 279,555 308,476 Q3 388,433 266,244 383,486 Q4 316,497 312,466 $ (30, 754) -10% $ (26, 632) -8% (32, 900) -11% (28, 921) -9% (122,189) -31% (117, 242)" -31% Totals $ 1,341,094 $ 838,753 $ 1,324,013 $ (185,844) -14% $ (172,794) -13% Third quarter telecommunications utility tax was $122 thousand, or 31% less than the previous year and $117 thousand less than budget. This large variance is partly driven by an $80k payment received in 2017 for past due taxes. Excluding this prior year payment from the 2017 activity; third quarter 2018 activity was $42k or 25% under the same period for the prior year. The 2018 revenue is budgeted at 1% less than 2017 actual revenue. (a) (b) (c) (d) Gambling tax currently includes card games, punch boards, pull tabs, and amusement games. Excludes golfcourse 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. 22 Z:\Council Agenda Items\Finance11.28.191Info Memo Sales Tax-2018-Q3.docx