Sales tax collections flat

City officials believe six-month trend is temporary

Yukon Progress, Yukon Review, City of Yukon, Sales Tax Chart
Source: Oklahoma Tax Commission

By Conrad Dudderar
Senior Staff Writer

Yukon sales tax collections have been flat the past six months but city officials are confident the trend is temporary.

Municipalities establish budgets based on the fiscal year, which starts July 1 and ends June 30. From July through December, Yukon received $11,287,351 in sales tax distributions from the Oklahoma Tax Commission. That’s only $24,312 (.02 percent) more than the total collected for that same six-month period in 2017.

“It’s expected,” City Manager Jim Crosby said of recent sales tax collections. “When you see the construction and everything Oklahoma City does around communities, trying to garner their share of the sales tax, that certainly pulls tax (revenue) away from us.

“It’s just an ongoing problem that a lot of communities in the Oklahoma City metropolitan area face. We’re facing it right now.”

Shoppers are reminded that Yukon’s city limits end at NW 10. Sales at stores south of 10th Street generate sales tax revenue for Oklahoma City.

For four straight months, Yukon’s sales tax revenues have been down compared to the same months the previous year.

Yukon’s December distribution of $1,875,635 is 3.4 percent below the $1,939,150 distribution in December 2017. The December distribution of sales tax collections by the Oklahoma Tax Commission primarily represents local tax receipts from October business.

This month’s sales tax revenue drop for Yukon follows declines in November (3.6 percent), October (0.8 percent) and September (4.7 percent) compared to the same months in ’17. Yukon has a 4 percent local tax rate, and sales tax collections fuel city government operations.

Yukon’s city manager anticipates Yukon’s sales tax revenues will “continue to be pretty flat” until construction of a new interchange on Interstate 40. Construction bidding for that project is expected next fall.

Yukon leaders expect the interchange at Frisco Road will spur considerable commercial and retail development in that area to boost the city coffers.

“With the new construction and new businesses, I think we’ll start growing again in sales tax,” Crosby said.

‘Shop Yukon’ Essential

Shopping at businesses inside Yukon city limits is essential to help the city’s economy, Crosby noted.

That’s because municipalities across Oklahoma do not receive property tax revenues.

“We’re the only state in the United States that doesn’t allow cities to operate with ad valorem tax, so we are very dependent on sales tax to operate government,” Crosby said.

“Sales tax (revenues) go up and down with the economy and is very volatile to deal with. We’re very dependent on it and work hard to maintain it at a high level if we can.”

In terms of sales tax collections, the first six months of 2018 were much better for Yukon than the last six months of the calendar year. From January through June, total distributions were more than $1.3 million (or 12.6 percent) above the same six-month period in 2017.

The last months that Yukon received more than $2 million distributions from the Oklahoma Tax Commission were January and February, which primarily represented local tax receipts from November and December 2017 business.

Yukon’s city manager expects the monthly collections to rebound in early 2019, since those will be based on the busy holiday shopping period.

Statewide, the Oklahoma Tax Commission reported a December disbursement of $153,384,772 in sales tax collections returned to the cities and towns reflected an increase of $9,079,052 from the $144,305,720 distributed to the cities and towns in December 2017.

In county returns, the counties shared in a $27,726,490 sales tax disbursement in December. Canadian County had $672,407 in sales tax revenues this December, a 9.6 percent decline from the December 2017 total. But that followed a November distribution that was up 9.4 percent.