JEROME - The Town Council will soon follow the lead of Cottonwood and Clarkdale's councils by raising the town's sales tax rate. The increase from 3 percent to 3.5 percent will become effective Jan. 1.
A public hearing with a second and final reading of Ordinance 362 was held Tuesday night during the council's regular meeting.
Rosemarie Shemaitis, deputy clerk, told the council that the Clarkdale ordinance was used as a model for the original Jerome Ordinance 361. She said the original did not include a category for sales tax on construction. Consequently, the ordinance had to be changed, delaying approval and the effective date of the new sales tax rate.
One provision of the ordinance is that the new tax rate will not apply to contracts entered into prior to the effective date of the ordinance.
Ordinance 362 will amend Ordinance 361, adopted by the council Oct. 13.
Vice Mayor Jay Kinsella made a motion to approve the ordinance, which passed unanimously.
When the council set its fiscal year 2009-2010 budget in September, sales tax was one of the primary sources of revenue. It was estimated at $500,850, an increase from the actual $477,153 collected last year.
Things were looking up in August when Jerome saw an increase in retail sales tax from $13,596 in Aug. 08, to $15,236 for the same month this year. Year-to-date collections in August also ran ahead of the same month last year. Jerome collected total sales tax revenues in Aug. 09 of $78,750, compared with $76,904 for Aug. 08.
But the good news didn't hold in September's sales tax report by the Arizona Department of Revenue. The town saw significant drops in sales tax revenue from the same month last year.
Total collections for Sept. 09 were $35,810, a decrease from $40,108 in Sept. 08. Year-to-date totals also dropped from $117,012 for September last year to $114,560 the same month this year.
