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By Tim Brown, Operations Manager, County Information Project |
One proposal to the NE PROPOSAL TO THE Legislature is that EGISLATURE IS THAT an additional half-cent local sales tax be authorized as a dollar-for-dollar buy-down of local property taxes. While details have been sketchy, the general outline is that a quarter cent each would go to cities and counties and would be in addition to any existing state, city or county sales tax.
Naturally such a tax shift would create winners and losers among taxpayers. It would also clearly be more beneficial to some counties than others. Counties that have a strong retail base, particularly where the surrounding counties do not, will obviously benefit from an additional sales tax. In effect, they will be able to collect sales taxes from shoppers who reside in surrounding counties as well as from other non-residents. The residents of the surrounding counties will actually lose out as their overall taxes increase.
Some of those counties can be identified by looking at the estimated sales tax collection for 2005. The accompanying map shows that 13 counties would have been able to collect less than $10,000 if they had an additional quarter cent sales tax in place during 2005 (four would have raised less than $2,500). The calculation assumes that all products subject to the state sales tax would have been subject to this proposed local sales tax.
While total sales are likely to be higher in 2006 and following years, it is not clear exactly what products would be subject to the proposed local sales tax in the future. Therefore, the estimate from 2005 should only be used as a rough guide to what collections a county could expect from a quarter cent sales tax.
