DOBSON — A new store in Stokes County could have a negative impact on Surry County’s sales tax collections.
Finance Officer Sarah Bowen told the Surry County Board of Commissioners that county officials aren’t certain of what impact a new Walmart will have on Surry County tax receipts.
The Walmart store opened in March in King.
“We don’t know what effect it will have, but we will lose some revenue,” said Bowen.
County Manager Chris Knopf’s recommended budget, which he presented Monday evening, calls for nearly $77 million in county expenditures.
Knopf told the board the budget’s expenditures and revenues are balanced, as is required by state law.
Sales tax collections have become the county’s number two funding source, second only to property tax revenues, and in recent years sales tax figures been trending upward.
The budget uses $15.3 million generated by sales tax collections to balance the budget, which is $1,175,000 less than county staff included in the 2016-17 fiscal year’s budget, said Bowen in a subsequent interview.
However, Bowen said she and other staff members don’t really have any idea what effects the new store will have on collections. It is not possible to know how much business will be diverted from Surry County establishments to the King store.
Bowen also explained the manner in which sales tax collections make their way to the county. Businesses remit sales tax collections to the state. Then the state sends a lump-sum check to the county. There is no statement which identifies what each business collects.
Thus, Bowen said county staff members aren’t able to know how much in sales tax collections a similar store collects.
Additionally, it takes about 90 days from the time of sale for the county to receive the sales tax collections, according to Bowen. The business remits its sales tax collections to the state the month after it is collected. Then, it takes a couple of months for the dollars to funnel back to the county in which they were collected.
Given that the Walmart opened in March, county officials won’t receive their first inkling as to how much the store will affect sales tax collections until at least the end of June.
Until then, county officials are left with what amounts to an educated guess.
“We truly don’t know how it will affect us,” explained Bowen. “We used that figure to be on the safe side.”
Andy is a staff writer and may be reached at 415-4698.