Community Issues That Matter: Local retail sales, adjusted for inflation, declined in Elizabethton, Carter County9:32 am | October 22, 2012
The recession and inflation adversely affected retail sales in Elizabethton and Carter County in the Second Quarter of 2012, and the slump in sales tax receipts is being felt by local governments and schools.
“Carter County dollar sales increased 0.9 percent in the second quarter of 2012. But we (Carter County) also had inflation of 1.9% in the same period, so real sales in Carter County (retail volume) declined by about 1 percent. A fluctuation of this size is routine when looking at county and small city data,” said F. Steb Hipple, ETSU professor of economics and associate in the Bureau of Business and Economic Research.
According to the Tennessee Department of Revenue report for August 2012, net local option sales tax collections (the amount after a 1.125 percent deduction by the State of Tennessee for administrative costs) totaled $910,834 in Carter County. The August 2012 report reflected actual collections in July 2012.
A total of $695,839 went to the City of Elizabethton, $184,297 to Carter County, $18,150 to the City of Watauga, and $12,546 to Johnson City, the latter for sales in the western part of Carter County annexed by the City of Johnson City.
According to City of Elizabethton Finance Director Jerome Kitchens, local option sales tax receipts to the City of Elizabethton for the month of August 2012 indicated net collections of $695,839 in July 2012 were down from $718,297 collected in July 2011.
Kitchens said there was also a reduction in net collections for education, which is distributed to city and county school systems based on average daily attendance. For the month of July 2012, schools received $347,919, down from $359,148 received for the same period in 2011.
The City of Elizabethton’s General Fund proceeds net for school capital projects deduction, totaling $281,815, were down from $290,910 received for the same period in 2011.
According to the Tax Foundation, a Washington, D.C.–based, nonpartisan tax research organization, Tennessee local sales taxes average 2.43 percent. Forty-four of the 95 counties in Tennessee are at the maximum 2.75 rate. The lowest county sales tax, 1.5 percent, is in Johnson County.
In Tennessee, the retailers’ sales and use tax is imposed on the privilege of selling tangible personal property at retail or storing such property for use or consumption in the state.
According to www.BizFilings. com, the sales and use tax in Tennessee is imposed on every person who:
• Engages in the business of selling tangible personal property at retail, uses or consumes any item or article of tangible personal property, irrespective of ownership;
• Receives property or services subject to the sales or use tax ;
• Rents or furnishes any property or services subject to the sales or use tax ;
• Stores for use or consumption in Tennessee any item or article of tangible personal property;
• Leases or rents tangible personal property, either as lessor or lessee, within Tennessee; and,
• Charges taxable admission, dues, or fees; sells space to transient dealers or vendors.
The sales and use tax applies to sale, rental, or charges for accommodations furnished to transients, garage and parking lot services, telecommunications, repair services performed with respect to tangible personal property, laundering, dry cleaning, bathing and grooming of animals, installations of tangible personal property, and charges for warranty or service contracts.
Tennessee has the highest average combined sales tax rates in the U.S. at 9.43 percent for every dollar spent on taxable items, according to the Tax Foundation. Next highest are Arizona, 9.12 percent, Louisiana, 8.86 percent, Washington State, 8.83 percent, and Oklahoma, 8.68 percent. Even with the highest combined sales tax rate, Tennessee was ranked 13th in overall business tax climate by the Tax Foundation in both 2011 and 2012.
Five states with the lowest average combined rates are Hawaii, 4.35 percent, Maine, 5 percent, Virginia, 5 percent, Wyoming, 5.18 percent, and Wisconsin, 5.43 percent.
The highest sales tax rate in the U.S. is in Tuba City, Arizona, which has a combined rate of 13.725 percent. This rate is composed of a 6.6 percent state tax, a 1.125 percent Coconino county tax, and an additional 6 percent tribal tax levied by the To’Nanees’Dizi local government.
Local option sales tax collections fluctuate each month based upon spending habits of residents and visitors to Carter County.
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