Sales taxes soar in 2020

The sales tax totals collected by local jurisdiction like the local cities, county and library defied most logical expectations in 2020. For amounts that were administered to the city of Wimberley during the calendar year 2020, revenue from sales tax increased almost 15 percent. That was the lowest increase of any local jurisdiction compared to the prior year.

The state of Texas collects 6.25 percent of almost all sales make in the state. There are some exceptions made, such as food at the grocery store, which does not have a sales tax applied. Locally, jurisdictions can apply for sales tax allocations until an area reaches the state maximum of 8.25 percent.

The cities of Wimberley and Woodcreek both receive one percent of sales made within their jurisdic-tion. The Wimberley Village Library gets half a percent of sales made within the Wimberley ISD boundaries and Hays County gets half a percent of sales made in certain sections of the county. For the majority of the Wimberley Valley, that makes up the full 8.25 percent.

With the quarantines and shutdowns of 2020, many were concerned the funds from sales tax would dry up.

“I think everybody anticipated a big downturn in sales tax,” Paul Parker, interim city manager for the city of Wimberley, said.

“The city reduced their sales tax projection last year and again this year.”

Those concerns haven’t come to fruition.

For the city of Wimberley, the only month in 2020 that was lower than the previous year was April. The state sends each jurisdiction a check from the total collection of sales tax two months after the sales were made. That means that the sales tax check in April of 2020, which was down a bit less than eight percent, represented sales made in February. Every other month in 2020 exceed the allocations from the same month the prior year.

In 2019, the city of Wimberley received $960,638.45 from sales tax allocations. In 2020, Wimberley received $1,103,262.41.

“I can only speculate as to why, because we don’t get a detailed report (from the state of Texas),” Parker said. “There was a change last year in the point of sale on Amazon. Instead of sales tax going to where (a product) is shipped, it goes to where it is received in most cases… That was a general shift. I think a lot of it, and this is just my opinion, but I think COVID has taught us to trade more local than drive into San Marcos or wherever… Even though those groceries are tax exempted, there are so many things in a grocery store that are not. I think we’ve just had locals shopping local. I have no proof of that. That is just my thought process.”

Each jurisdiction that receives sales tax experiences different increases and declines on a monthly basis because sometimes busi nesses pay taxes before the taxes are due or after an audit, which can artificially increase a given month. This is easier to see in the smaller jurisdictions, but over the year, the trends seem to say the same thing – 2020 was a strong year for sales locally.

Hays County received $23,400,715.36 in sales tax allocations in 2019, and that increased nearly 24 percent in 2020 to $28,929,896.46 in 2020. The Wimberley Village Library received $682,245.92 in sales tax allocations in 2019, and that increased nearly 24 percent in 2020 to $844,793.35. The city of Woodcreek saw a greater percent increase. Woodcreek received $61,331.02 from sales tax allocations in 2019, and that increased more than 47 percent in 2020 to $90,309.36.

The trend has clearly continued in the early part of 2021. The sales tax allocations, from January and February in 2021 increased for each of these jurisdictions compared to the same month last year.