File photo
File photo
The City of Denton budget has experienced a significant hit due to a decrease in sales tax revenue as a result of COVID-19 business closures.
According to the Denton Record-Chronicle, Denton had a 5% decrease in sales tax revenue in March, but the finance staff is projecting that April’s drop will be 40%.
The sales tax collection and reporting operations will take some time to reflect the April figures because of the two-month delay between the purchase date and the city’s receipt of the sales tax.
Because of the lag between when purchases are made and the city receives the sales tax, the city will also be waiting on information such as where the purchases are being made. This insight will be valuable for the finance staff as it anticipates the full damage to the local economy.
Texas sales tax is collected in the city where orders are fulfilled, rather than the areas where the order came from. The Texas Comptroller’s office was pushing for that to be changed prior to the outbreak of the coronavirus.
The city will be waiting for data from April’s sales tax to become available before they choose which course of action to take.
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