SHERIDAN — The city of Sheridan’s finances remain on track and tax revenues continued to exceed projections through the second quarter of fiscal year 2020, City Treasurer Karen Burtis told Sheridan City Council during its regular meeting Monday.
Monthly sales tax returns in November — city sales tax reports are always three months in arrears — totaled $355,412, a 2.6% increase compared to last year. Those revenues were down slightly compared to the previous month, but Burtis said tax revenues typically dip in November.
Sheridan’s tax collections on the year to date amount to $2,723,510, which represents 4.5% growth over last year, Burtis said. The city’s fiscal year 2020 budget anticipated sales tax revenues would grow by 2.5% and halfway through the year its actual returns continue to comfortably exceed expectations.
Internet sales tax revenues continue growing faster than traditional sales each month, Burtis’ report showed; Sheridan collected $87,928 from internet sales in November — a 127.8% increase over last year — and $493,555 on the year to date — a 179.7% increase compared to last year.
Without those internet revenues, the city’s overall sales and use tax revenues would be down. Burtis said tax revenues would have declined 13.1% in November without internet sales and 8.2% on the year.
City officials are still trying to parse the implications of the local surge in internet sales tax returns.
The increase can be partially explained by a law that took effect last February, which required all businesses that sell products within the Sheridan city limits — including online retailers without a physical presence here — to report and remit sales taxes.
But city councilors are concerned that the drop in overall sales and use tax means the city’s brick-and-mortar businesses are taking a hit from the rise in internet sales.
Burtis said sellers choose how to characterize a sale made in city limits, which creates uncertainty around where exactly Sheridan’s internet sales are coming from. For example, Walmart sells products online that can be picked up in the local store and it is unclear whether those count as online or in-store purchases.
But local businesses that sell products online are not paying internet sales tax unless they are shipping the item sold to a Sheridan resident; if they are shipping a product outside the city, they would pay sales tax to the municipality where it is delivered.
Burtis provided council with an update on its accounts halfway through the fiscal year. The city has collected 52% of its projected general fund revenues and spent 49.4% of its projected general fund expenditures so far this year. Most of the city’s other accounts are hovering around 50% in terms of both revenues and expenditures.
The city’s golf fund — which has already made 69.5% projected expenditures and only collected 37% of its projected revenues because of a series of long term improvements the city made to the golf course this summer — and weed and pest fund — which has made 33.8% of its expenditures and collected 28.3% of its revenues, as the fiscal year thus far has mostly spanned winter months — were notable outliers.
Sheridan City Council also elected new officers Monday. Councilors chose Richard Bridger as council president and re-elected Thayer Shafer council vice president. Council officers are elected to one-year terms.