Amazon sales add to area tax revenues


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The JournalNews analyzed data from the Ohio Department of Taxation for this story. Count us to continue our in-depth coverage on issues that impact the economy in Butler and Warren counties.

Sales tax revenues are up from 5 to 10 percent so far this year across southwest Ohio’s counties, reflecting the region’s improving economy and rising consumer spending, area government finance officials said.

Some of the recent gain in sales tax revenues could be related to Amazon, the Seattle-based online retail giant that started collecting sales tax in June on purchases by Ohio residents, but county auditors said it is difficult to gauge that company’s impact on their coffers.

Butler County has seen the region’s largest sales tax revenue boost this year in the region, jumping nearly 10 percent from the same period in 2014 to $23.9 million, according to Ohio Department of Taxation data obtained by this newspaper.

Roger Reynolds, Butler County auditor, attributed the increase to county infrastructure growth attracting more consumer spending to the area.

“Our projections going into next year with the Steiner project in Liberty Twp. will only add to the increase in our sales tax revenue,” Reynolds said. The $350 million Liberty Center development opening this month features more than 1 million square feet of shopping, dining, office and residential space

Sales tax measures consumer spending, a closely watched barometer of economic health because it drives about two-thirds of the U.S. economy. Throughout southwest Ohio, sales tax revenues have steadily increased since tanking in the depths of the recession in 2009.

Sales tax revenues increased across the nine-county region in September, the first month that Ohio counties and transit authorities received taxes from Amazon. Counties and transit authorities receive sales tax revenues about 90 days after it is collected, so the most recent figures reflect Ohio residents’ June purchases.

“Sales tax returns are confidential, so we cannot publicly disclose Amazon payments to the state,” said Gary Gudmundson, an Ohio Department of Taxation spokesman.

However, given Amazon’s announcement that it would start collecting Ohio sales tax in June on purchases by state residents, and the fact that the company is a significant player in the retail market, “it seems safe to say that Ohio and it’s counties and transit authorities received additional revenue in September resulting from the addition of this company to the roster of sales tax collectors,” Gudmundson said.

Amazon officials said the company would start collecting sales tax in June for purchases made in Ohio after it announced plans to build three data centers in the state that are expected to create 1,000 jobs.

Ohio doesn’t require online or catalog retailers to collect sales tax from state residents unless that company has a physical operation in the state.

Taxpayers are supposed to report and pay sales tax on online purchases when they file their tax returns, but only about 10 percent did so in tax year 2013, state officials said.

It’s not known how much Amazon’s collections will add in sales tax, but the state tax department estimated Ohio will lose out on about $400 million in unpaid sales or use tax on so-called remote sales this year.

Greene County Auditor David Graham said counties typically see spikes in sales tax revenues related to the back-to-school and Christmas shopping seasons several months after the fact.

“At this point it is continuing the through-line that we’ve been on,” Graham said. Greene County has seen its sales tax revenues increase to $14.89 million from January to July, a 5.1 percent bump from the same period last year.

Montgomery County sales tax revenues this year increased to $46.48 million, a 7 percent increase over the same period in 2014. Tim Nolan, director of the Montgomery County Office of Management and Budget, said the increase is due to strong retail and motor vehicles sales, as well as a sales tax on Medicaid programs.

“What we’re seeing with Medicaid expansion at the state level, there are more people on health plans and that is why we think the revenues are up,” Nolan said.

Clark County sales tax revenues this year increased to $14.67 million, a 6.1 percent increase over the same period in 2014.

“I would doubt that it has anything to do with Amazon sales. I don’t think our population is a heavy user of and purchaser off of Amazon,” Clark County Administrator Nathan Kennedy said. In addition, the county’s “significant” increase in sales tax revenue pre-dates the start of Amazon’s collections in June, he said.

Ohio consumer spending increased 0.3 percent in July for an annual rate of increase of 5.3 percent during the 5-month period from February to July, up from 1.1 percent during the previous 5-month period, according to a September report by Ohio Office of Budget and Management Director Timothy S. Keen.

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