6.1. SR 05-07-2018 - Laserfiche WebLink

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Local Option Sales Tax Analysis for Elk River, MN 5 Figure 3: Estimated tax proceeds and who pays in dollars based on 2015 data Dollars Dollars Total Paid By Paid By ESTIMATED Tax Elk River Non- TAX PROCEEEDS Proceeds Residents Residents @ 1/8th of a Percent $485,834 $264,602 $221,232 @ 1/4th of a Percent $971,668 $529,204 $442,464 @ 3/8ths of a Percent $1,457,501 $793,805 $663,696 @ 1/2 of a Percent $1,943,335 $1,058,407 $884,928 Total Taxable Sales: $388,667,017 The total taxable sales in the city has increased 42 percent from 2009 to 2015 from $274 million to $389 million. Retail and service taxable sales, however, have increased 20% during the same timeframe. Since tax proceeds are calculated as a simple percentage of total taxable sales, the trend during the past 12 years gives some sense of stability if the tax were enacted. Clearly the downturn in taxable sales during the great recession impacted sales tax collections (see Figure 4). Although the city has experienced significant growth in taxable sales since the end of great recession, this trend is not assured. Figure 4: Total taxable and total taxable retail and service sales (in millions) in Elk River from 2003 to 2015 (source: Minnesota Department of Revenue) Proceeds from use taxes would also be added to the estimated tax proceeds from sales taxes. Based on 2015 figures, for each one-eighth of a percent enacted, city officials can expect an estimated additional $19,200 in use (not sales) tax proceeds derived from city businesses purchasing products from out-of-state sources. City officials can also anticipate some additional use tax proceeds, but $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 03 04 05 06 07 08 09 10 11 12 13 14 15 Retail and Service Sales Total Taxable Sales