PITTSBURG, Kan. — Gov. Laura Kelly announced this week that despite the coronavirus pandemic’s impact on the economy, Kansas tax collections in August were more than $40 million higher than estimated — a trend that has also been seen locally, as the City of Pittsburg has announced that recent sales tax collections were higher than for the same time last year.
Statewide, retail sales tax collections were 2.5 percent, or more than $5 million, above what had been estimated, with over $207 million collected — an increase of $1.8 million compared to August of 2019.
At the local level, meanwhile, Larissa Bowman, Pittsburg’s deputy finance director, announced at last week’s city commission meeting that the city had collected its sales tax revenues for the period of January through August, and they were approximately 2.7 percent higher than the same period in 2019.
$6,188,769 was collected in the first eight months of this year, compared to $6,025,304 in the first eight months of 2019, Director of Finance Jamie Clarkson said Wednesday.
City Manager Daron Hall also commented on the higher-than-expected revenue.
"We were looking at scenarios where we were going to be down a million, maybe two million dollars," Hall said, "so the people in this town have really stepped up, and thank goodness for them and thank goodness for all the retailers finding a way to stay open."
Not all of the increased local tax revenue, however, is coming from local retailers.
In response to a question from Commissioner Patrick O’Bryan, Bowman said last week that there had been "a substantial increase" in tax revenue at both the city and county level from out-of-state sales over the internet, which the Kansas Department of Revenue announced in August 2019 that it would begin collecting.
The revenue from the newly implemented tax on internet sales is included in the state’s compensating use tax revenue, which is also charged for other kinds of out-of-state purchases. Compensating use tax collections statewide in August were $12.7 million, or 38.9 percent, higher than last August with a total of $45.3 million collected, which was $9.3 million more than estimated, according to the governor’s office.
So far, the State of Kansas has collected $95.7 million in compensating use taxes this fiscal year — an increase of $24 million, or 33.6 percent, compared to the same two months of last fiscal year.
At both the local and state level, officials cautioned that the recently reported higher tax revenues should not lead people to be overly optimistic about revenues in the coming months.
"We have some really tough months coming up," Hall said, noting that cancellations of many events, including sports games, as well as the expiration of federal stimulus money that people were likely spending on retail purchases, could impact sales tax revenues in the near future.
"While this news shows that the steps we have taken to protect our economy are working, we have to remain fiscally cautious," Gov. Kelly said in a press release. "The state of Kansas is still recovering from COVID-19 and we have to stay vigilant. That means all Kansans should wear a mask, practice social distancing and avoid mass gatherings so we can keep our schools and our businesses open."