A series of articles in the Arkansas Municipal League’s City & Town publication suggests possible legislative changes to the state’s local sales tax information requirements. (Click to read)

Arkansas Municipal League archives

City officials in Arkansas may soon have more tools available to help understand and evaluate trends and fluctuations in local sales tax collections.

Fayetteville City Council members are expected to approve a resolution on Tuesday in support of proposed changes to state law that would provide cities with monthly reports which include detailed sales tax data about individual local businesses.

Currently, the state only provides cities with a single payment of taxes, with no business names or addresses tied to any specific amounts.

According to Paul Young, finance director of the Arkansas Municipal League, this information is not enough.

“Good management of city revenues requires that city officials be able to monitor local sales tax collections and understand trends,” wrote Young in a April 2012 article in the Arkansas Municipal League’s City & Town publication.

“In today’s world of technology resources, the details of tax collection information should be available and accessible at any time, so that a local government can easily understand how initial collections and required adjustments ultimately produce the amount received at the local level,” wrote Young.

Paul Becker, Fayetteville’s finance director, agrees.

“Right now, when we’re doing forecasting, all we have is basic historical data,” said Becker. “We don’t know if weak or strong sales are coming from a particular industry, or if they’re coming from the mall area, or what.”

A reliable monthly report, Becker said, would allow him to understand what generates tax revenues and help provide a sound basis for budgeting future collections.

Young’s article was part of a series intended to identify current availability and usage of local sales tax information information; highlight examples of how the matter is dealt with in other states; and provide possible legislative changes for improvement.

Young said the current process helps keep intact a wall of confidentiality that presumes detailed collection information could create a competitive disadvantage to businesses.

The league’s suggestion is to compromise by making the information available, but only to a single individual in each city who agrees to keep the data private. In other words, the data would not be made public and would be exempt from release under the Arkansas Freedom of Information Act.

Young said an initial draft of the proposed changes was presented to a joint meeting of the House & Senate City/County Committees in December, and that a finalized bill would soon be complete.

About 70 cities have notified Young of an adopted resolution similar to what Fayetteville aldermen are considering this week.

“I expect more actually have and others will do so,” said Young.