Mayor Nutter's Number Crunchers Perplexed About Drop In Sales Tax Revenues
By Mike Dunn
PHILADELPHIA (CBS) -- Philadelphia officials don't quite know why revenues from the city sales tax are lower than expected -- but they suspect that Amazon and other online retailers may be to blame.
At a budget hearing this past week, Mayor Michael Nutter's budget experts said revenues this year from the city's two-pennies-on-the-dollar sales tax were below projections -- down about 7% in fact. Budget Director Rebecca Rhynhart admitted to being perplexed.
"The bottom line is we don't know the answer as to why," she said.
Rynhart though did throw out one theory -- that online retailers who are charging tax to Philly customers are charging only the state tax of 6% in the city -- not the full 8%.
"Just some unscientific sampling has shown that (they're) not," she said. "We're not getting our full share of the sales tax revenue from that method."
Finance Director Rob Dubow agreed it's a potential problem and said they're meeting with state revenue officials to solve it.
"We have some issues with what's going on with online collections," Dubow said. "So I think we're in the process of talking with (state revenue officials) to try to figure out what's going on there. We're trying to figure out what that number is and what it should be."
The first $120 million of city sales tax revenue goes to the school district, the rest to the city itself. The Administration had originally projected about $155 million to go to the city in the current fiscal year, but now have lowered that estimate to about $144 million.
