Parish sales tax returns up but slip for quarter

Total sales tax collections for St. Mary Parish are up 7.3 percent through the third quarter of the fiscal year despite dropping nearly 6 percent in the third quarter itself.

St. Mary Parish Sales and Use Tax Administrator Barry Dufrene told the Council of Governments during a Monday meeting that the parish has collected $30.1 million year-to-date through its 4 percent sales tax. That is 7 percent higher than the $28 million collected through the same time period in 2010.

During the third quarter, however, sales tax collections dropped significantly.

Collections were $9.67 million. In the third quarter of 2010, collections were $10.2 million, equating to a nearly 6 percent drop from 2010.

Previous quarters had seen 18.3 percent and 11.8 percent growth over the previous year, respectively.

When removing audit collections, which are notoriously volatile, year-to-date tax collections are $29.1 million, up from $27.3 million in 2010 for a 6.3 percent increase. This is 5.9 percent above collections through the third quarter of 2009, but 4.3 percent below 2008 collections.

Dufrene noted that sales taxes coming from the Office of Motor Vehicles make up 10-12 percent of total collections, and they currently are on the rise. Such collections are cyclical because drivers tend to replace their vehicles every four to five years, he added.

Meanwhile, Dufrene added a new dimension to his usual speech on tax collections — the 4 percent hotel/motel tax collected on every room rented in the parish.

In January 2006, the parish collected about $45,000 in hotel/motel taxes. Between 2007 and 2010, six new hotels were built in St. Mary Parish. While they did not cause an immediate rise in sales taxes, they did facilitate two bumps.

The first was in 2008 because of hurricane evacuations to the area. The second came between June and November 2010 as a result of crews working on the BP Deepwater Horizon oil spill in the Gulf of Mexico.

Even with six new hotels in the area, collections for September were $45,000, exactly where they started more than five years ago, Dufrene said.

He did note that there is site preparation ongoing for a new hotel in the Amelia area as well.

The way to increase sales tax and hotel/motel tax collections, he said, is to get people to spend money, whether it is those who live here or those who are simply passing through.

“We have people coming through the parish. We just have to find a way to get them to stop and spend their money here,” Dufrene said.

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