A portion of Starkville’s 280-percent increase in July 2-percent hotel tax receipts was the result of a local business catching up on late tax payments to the state, a Mississippi Department of Revenue spokesperson confirmed Monday.
July statistics released by the city show sales tax collections from the summer month increased 13.33 percent from July 2015’s figures, while food and beverage receipts also jumped 6.33 percent in the same timeframe.
The city’s 2-percent hotel levy, however, increased dramatically, posting a 280.68-percent increase between July 2015 and this year.
July’s posted hotel gains do not give an accurate representation of the city’s lodging in the month, as MDOR spokesperson Kathy Waterbury said nine additional late tax payments from a local business inflated the total.
Waterbury did not disclose which business was late on its 2-percent payments to the state and did not say how much of the month’s total was made up of the late payment.
A review of previous hotel receipts shows other large increases in the past, including a 238.91-percent increase from July 2013 to July 2014 and a 392.9-percent increase from November 2013 to November 2014.
Besides late payments, Waterbury said changes to a business’ tax code designation or a lump sum payment from a business as a result of a past audit can also inflate local tax figures.
Sales increasing after dip
Starkville’s overall sales tax figures and 2-percent levies are continuing to improve compared to their 2015 marks after revenue streams dipped in May.
The city recorded $540,406.53 in general sales taxes collected at the register in July, outpacing last year’s almost-$477,000 mark. Starkville’s 2-percent food and beverage levy also increased in the same timeframe, jumping from approximately $133,500 to about $142,000.
Mayor Parker Wiseman said both increases are good indicators of Starkville’s healthy economy and are welcome after both streams dipped in May. From May 2015 to May of this year, Starkville’s overall sales tax receipts declined 4 percent, while its food and beverage tax dropped about 5 percent.
May’s dips were the only declines recorded for the calendar year, as both overall sales taxes (4.74-19.73 percent) and the food and beverage levy (6.33-26.04 percent) have posted gains throughout the year.
Through six months, Starkville’s sales tax has brought in $3.76 million this calendar year and is outpacing 2015’s monthly $521,616.07 average by an additional $16,000. Its 2-percent food and beverage tax has generated $1.15 million and is about $700,000 shy of 2015’s total. The restaurant tax is also outpacing its 2015 monthly average — approximately $164,000 — by about $11,000.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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