Sales tax collections show promise

Midwest City use tax collections up 47% in June

By Jeff Harrison
Managing Editor

Midwest City officials were pleasantly surprised last week when they received the June sales tax distribution from the Oklahoma Tax Commission.

Local businesses have been hit hard by the COVD-19 pandemic and that was expected to carry over to city government, which relies heavily on sales and use tax revenue to fund operations.
After a double digit decline in May, sales tax collections improved for June. The city reported a 2.33% decline in sales tax collections for June, while use taxes improved by 47.11% compared to 2019. Midwest City received $3,599,050 in sales and use tax collections, an increase of $36,273 or 1.02% more than the previous year.

Use tax is a type of sales tax placed on items purchased outside of the state but used inside the state. They include such things as online purchases and building materials.
The June sales tax check includes the second half of April and estimates for the first half of May.

The city will finish the 2019-20 fiscal year ahead about $1.1 million compared to the previous year. The new fiscal year begins July 1.

Midwest City fared better than many other cities in the metro. Oklahoma City saw a 15% decline in sales tax. Norman, which took a harder stance against reopening businesses, was down 15.3%. Yukon saw an 11.7% decline and Edmond was down 6.7% for the month.  Moore was comparable to Midwest City with a 2.7% drop in sales taxes.

“Moore is very similar to Midwest City in size, makeup and how we’ve developed our retail,” Lyon said. “To me it makes me feel better to see their numbers because I worry about an anomaly or a mistake with the check.”

State sales tax collections were down 12.2% in June.

Midwest City’s numbers were even better when compared to projections. The June sales and use tax collections were 4.99% ahead of estimates.  And for the year, Midwest City finished 2.81% ahead of projections.

“It’s amazing that we were over our projection,” Lyon said.

Officials are preparing for sales and use taxes to decline in fiscal year 2020-21. Christy Barron, city finance director, projects a 6.07% decrease in revenue for the year.

“We’re going to look at this quarterly and hopefully we don’t have a resurgence of COVID and more stores closing,” Lyon said.

J.C. Penney and Pei Wei recently closed in Town Center Plaza.

Midwest City’s sales and use tax rate is 9.1%. The city receives 4.6% and the state receives the remaining 4.5%.