Error gives city an additional $381K
Wednesday, June 18, 2014 1:00 AM
While the city received a hefty check from the state Tax Commission for March sales tax collections, the mayor said they won't be doing any additional shopping as it was in error.
The Tax Commission recently released its sales tax report for March sales which showed Philadelphia had $763,393 in sales tax collections, a $406,056 or 113 percent increase when compared to the same month the previous year.
That total, however, was about doubled what it should have been, Mayor James A. Young said.
He estimated that the actual collection for March should have been closer to about $381,700.
The state Tax Commission accidentally doubled the numbers for Philadelphia for March, he said.
"The money had already been deposited by the time we found out," Young said. "The Tax Commission said they would adjust the numbers for next month to compensate. We're going to manage like its not even there."
Sales tax makes up more than half of the city's revenue stream and funds such operations as police, fire and street departments, among others.
The city had $357,336 in sales tax collections in March in 2013.
Philadelphia's tourism tax is up 32 percent since July 1 or $24,971.
In March alone, tourism tax rose to $8,806. It was at $7,660 for the same period the previous year.
Philadelphia collects an additional 3 percent tax on hotel rooms. Those monies are used to promote tourism.
Despite the mistake, Young said the city most likely had a great month in March for sales tax.
"We don't know where the real number was but it tends to be like the rest," he said. "We've been positive every month this fiscal year."
Young added that Philadelphia has seen a lot of activity this year.
"Businesses have been offering several good products and many people have been buying local," he said. "I'm excited about the positive nature of business here."
The state's sales tax collections have a three-month cycle. Tax is collected by the retailer one month; it is reported and paid to the state Tax Commission by the retailer the second month; and the diversion is paid to the cities by the Tax Commission the third month.
The following figures reflect March sales tax collected in surrounding areas/cities with 2013 figures in parenthesis:
Canton: $204,761 ($210,717).
Carthage: $144,130 ($145,871).
DeKalb: $22,838 ($21,640).
Flowood: $928,585 ($903,509).
Forest: $206,377 ($197,775).
Louisville: $158,721 ($157,375).
Madison: $502,394 ($506,333).
Meridian: $1,311,002 ($1,298,575).