The holiday season was good for Dothan retailers, according to sales tax collections in December, despite the popularity of online sales drawing dollars away from brick-and-mortar locations and Hurricane Michael evacuees returning home.
In January, Dothan collected $7.03 million, reflecting December sales and showing a strong trend for the last three months of the 2019 representing sales numbers. However, for each of those months, the city collected less sales tax than it did in 2018, in a year-to-year comparison.
After Michael drove evacuees to Dothan and caused damage throughout the tri-state area in October 2018, Dothan’s sales tax collections rose 15% or more compared with November and December 2017 and January 2018.
January 2020’s sales collections were 6% less than January 2019’s, but Matt Parker, Dothan Area Chamber of Commerce president, said the slump is not a negative indication of the city’s economy. Rather, it shows that areas devastated by hurricane are operational again.
“It shows that the region is slowly recovering a little bit — recovering from that event,” he said. “Again, when you have an event like that, you’re going to see an upswing of our market.”
Parker said officials anticipated the decrease and prepared the fiscal 2020 budget accordingly.
For the fourth consecutive month in the current fiscal year, sales tax paid to the city topped budget projections. In January, the sales tax collection was $317,613 more than projections, bringing the total surplus to $2.32 million. Compared with January 2018 numbers, sales tax collections rose by more than $567,000.
Lodging tax collections also dropped in the last three months of the calendar year compared with the months after Michael. In January, the city collected $223,811 — 25% less than in 2019, but 6% higher than in 2018.
“We still have a strong economy,” Parker said. “We’re still on a really good, steady rate right now.”
Dothan also is seeing some money return to the local government paid by Alabama residents to remote online retailers.
The Simplified Sellers Use Tax is the flat 8% sales tax Alabama enforces on online retailers selling product in the state.
In January, the Alabama Department of Revenue paid $195,407 to the city, which is reflected in its general sales and use tax collections.
In February, the Revenue Department disbursed $295,246 to Dothan. The amount — over twice that in the same month of 2019 — reflects an increased number of businesses participating in the program compared with the prior year and healthy holiday sales growth statewide and nationally.
The National Retail Federation shows a trend of increased online sales every year.