Sales Tax Is Taking Off

WHEELING – After a dismal first three months, collections from Wheeling’s new municipal sales tax have taken a turn for the better in recent weeks, according to city leaders.

According to city Finance Director Michael Klug, estimated collections totaled $197,000 for the month of January and the first week to 10 days of February. The city pulled in just $278,000 – less than $93,000 per month – from October through December.

The city needs to average $183,000 in revenue per month to meet its six-month projection of $1.1 million by fiscal year’s end June 30. This year’s budget doesn’t account for sales tax revenue from the April-June quarter because the city won’t actually receive it until sometime in July.

“It’s too early to say we’re on track, but we saw a dramatic improvement in January,” said Mayor Andy McKenzie.

Neither McKenzie nor Klug could say for sure why the sales tax seems to be performing so much better all of a sudden, but McKenzie believes awareness of the tax has increased in recent months. The State Tax Department supposedly notified all businesses of the new tax before it went into effect Oct. 1, but McKenzie said it’s still been a constant education process, with some retailers still charging only 6 percent until just recently.

Another possible explanation for the recent upswing is that by state law, catalog retailers who do business in the city didn’t have to start charging the tax until Jan. 1.

Klug said he will continue to keep in touch with State Tax Department officials and monitor estimated revenues as officials wait for more solid trends to emerge.

“We’re still kind of working our way through this right now,” he said.

City leaders have pledged to use sales tax revenue for two purposes – infrastructure needs and improvements to WesBanco Arena.