A “large audit payment” by a company in Newark resulted in a May sales tax windfall for the city.
According to figures released this week by the State Comptrollers’ office, Newark’s 1.5-cent sales tax brought in $72,730 in May. That’s more than three-quarters as much as the city collected for the entire year of 2013.
The city averages about $7,800 a month.
R.J. DeSilva, spokesperson for the comptroller’s office, said the monthly increase was due to a large audit payment by a company – but reminded readers that sales tax information for individual companies is confidential under the law.
City secretary Diane Rasor said the comptroller’s office told her one of their auditors had originally placed the taxpayer in the wrong category.
“Probably they had them outside the city limits,” she said. “Once they discovered the error, they notified the taxpayer, and they got a check this week for $65,798. It’s a one-time increase.”
The city uses a half-cent of its sales tax revenue to reduce property taxes, and the rest goes into the general fund budget. Once the council gets the news, they will determine whether to use the funds for something special, or just keep them in reserve.
With the big May payment, Newark in five months has already surpassed what it collected in all of 2013 and jumped from ninth in the county to seventh, moving ahead of Alvord and Paradise.
Three Wise County cities showed a drop in monthly payments for May, and three were still in negative territory for the year.
Rhome, New Fairview and Paradise saw their May rebate slip from last year’s. Rhome’s was down nearly $20,000 or 37 percent, while New Fairview’s was down more than $13,000 or 35 percent.
Paradise also slipped behind for the month, with a rebate of $10,422 – down 6 percent from last May. But the city is still in the black for the year.
Bridgeport, which actually experienced a gain this month compared to last year, remains down for the year by 16.06 percent.
Wise County, which gets a half-cent sales tax to help reduce property taxes, showed a 16.6 percent decline in May but remains 6.6 percent ahead for the year so far, with nearly $2.2 million in the bank through five months.
Comptroller Susan Combs said state sales tax revenue in April was $2.27 billion, up 5.6 percent compared to April 2013.
“Growth in sales tax revenue was spurred by increases in the telecommunications sector and services sector,” she said. “Increased business spending in the wholesale trade sector also contributed to the latest monthly gain. This marks 49 consecutive months of growth in sales tax collections.”
Combs sent cities, counties, transit systems and special purpose districts May allocations totaling $716 million, up 7.1 percent compared to May 2013.
Those figures represent monthly sales made in March as well as January, February and March sales by businesses that report tax quarterly.