Year-End Sales Tax: Hotels Suffer

In the past year retail trade has carried the load as real estate, hotels falter

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PAYSON SALES TAX BY BUSINESS TYPE

Retail trade remained the anchor of Payson’s economy through the end of the fiscal year, with hotels and entertainment taking a heavy hit.

The detailed analysis of the local sales tax through the end of June reveal an across-the-board decline of 8 percent over last year — led by a 14 percent drop in sales tax from accommodations and a 30 percent drop in the arts and entertainment category.

Fortunately, the retail trade declined only about 8 percent, according to a detailed analysis of figures included in Payson’s year-end financial report.

The figures seem to suggest that the town’s tourist sector took an especially hard hit in the past 12 months, in addition to an 11 percent drop in real estate, rentals and leasing.

Oddly enough, revenue from restaurants and bars dropped 5 percent, to about $586,000. That drop was smaller than the overall drop and much smaller than the drop in hotel and motel sales — perhaps suggesting that local residents were helping compensate for a sharp drop in overnight visitors.

Surprisingly, construction dropped just 6 percent — less than the overall average.

Sales dropped in every single category, with local sales tax dropping 8 percent from $7.3 million in fiscal 2007/2008 to $6.7 million in fiscal 2008/2009.

The detailed figures show that Payson did the the same as the rest of the state on most counts.

The state collects a share of the sales tax statewide, then distributes it by population.

The so-called “state shared” sales tax coming to Payson for Fiscal 2008/2009 totaled $1.2 million, an 8 percent decline from last year — the same as Payson’s overall sales tax decline.

Town officials have credited tourism and heavy promotion of new events for preventing a worse decline in sales in the just-concluded fiscal year.

However, the much smaller drop in restaurant revenues suggest either local residents helped compensate for a drop in spending by overnight guests or the town has drawn a lot more people who come up for the day, have a restaurant meal, then head home without renting a hotel room or they are camping in the national forest.

The four-year trend since 2005 shows that local sales tax revenue peaked at $7.5 million in 2006/2007, dropped 3 percent in 2007/2008, then fell off the ledge into recession in 2008/2009.

In the past two years, sales tax revenues have dropped a total of 10 percent.

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