Editor’s note: This article is by Andrew McKeever of the Manchester Journal, in which it was first published Thursday, June 4, 2015.
MANCHESTER — Local option tax receipts made a sharp uptick in the first quarter of 2015, posting an average increase of roughly 9 percent across sales, rooms, meals and alcohol taxes.
During the first three months of 2015, the town collected $175,092 in local option sales tax revenue, an 8.8 percent increase compared to the comparable quarter in 2014, when Manchester obtained $160,814 from the option tax on sales. The increase was even stronger in the rooms, meals and alcohol sector, where the town collected $76,512, an improvement of 9.12 percent over the comparable quarter in 2014, when the town collected $70,115 in local option tax revenue.
That made the January-March period the best performer ever since the meals, rooms and alcohol local option tax was implemented in 2008, according to Town Manager John O’Keefe.
The local option sales tax also posted its highest number for the first quarter of the calendar year since 2006.
Option tax revenues have stalled in a range between $155,636 in 2008 when they slumped during the economic downturn that kicked in with full force later that year.
Aside from the quarter that ended in March 2010, when a mild recovery in sales boosted local revenues to $156,303, income from the local option sales tax was stuck between $134,370 and $148,955, before breaking out to $160,814 in the first quarter of 2014. The most recent numbers confirmed that strengthening of the recent trend.
The option tax on rooms, meals and alcohol sales hit a previous peak in the first quarter of 2013, posting a total of $71,685, before declining slightly in the comparable quarter last year.
This year’s revenue was the biggest year-to-year increase since the second year of the rooms, meals and alcohol local option tax.
The quarter than ended on March 31, 2009, yielded slightly under $40,000. The following year’s first quarter reached $67,676, and the numbers have fluctuated around that vicinity in the years since, until this year.
The statistics are official results tallied by the Vermont Department of Taxes.
O’Keefe speculated that counter-intuitively, perhaps, the cold weather this past winter may have had something to do with the results.
Visitors coming to ski may have chosen to go shopping or dining instead, when the temperatures dropped to single digits or below zero, he said.
“I think it’s tied pretty closely to what we spend on snow and ice removal,” he said, adding that this enabled visitors who were drawn to the region for skiing or outdoor winter recreation, to get around while they were here.
Lower gasoline prices, relative to recent years, may explain part of the increase as well, he said.
Overall, fiscal year 2015 was the highest year on record for rooms, meals and alcohol taxes, with a total of $349,946, he said in a statement last week when the statistics were released.
The local option sales tax is a 1 percent surcharge on top of the state sales tax rate of 6 percent and applies to all the items not exempted from the sales tax. The 1 percent surcharge is also tacked onto the 9 percent meals and rooms tax, and also added to a base 10 percent tax for alcohol sales.
Berta Magenniss, the executive director of the Manchester and the Mountains Regional Chamber of Commerce, saw the results as confirmation that the town’s economy was continuing with an upswing.
The increase could not be explained simply by an increase in prices providing a higher base from which to spark stronger results, she said. “I think we have a strong travelling public here and our numbers in terms of the visitor’s center (on Bonnet Street, where the chamber makes its headquarters) are holding very strong,” she said.
“So I have to think we’re on the upswing and we have a town that’s very vibrant with a lot going on.”
Ann Hauser, the co-proprietor of The Mountain Goat, an outdoors recreation clothing store, said they had had a good winter season and their sales results echoed the bigger picture shown by the overall option tax numbers.
Outdoor gear sold well during the colder-than-usual winter, she said.
“We sold out of underwear and gloves and as the spring went on and it wasn’t warming up we continued to sell a lot of stuff,” she said.
“Manchester seems to be bustling and we’re happy with things downtown right now.”
Frank Hanes, who owns and runs the Inn at Manchester, also said the winter season had been a decent one from a rooms and meals standpoint.
“I would say it was a good quarter for us,” he said. “I was quite pleased.”
Not all merchants shared in the perception that the overall trend lifted their businesses, however. Joy Slusarek, the owner of Joy: All Things Underthings, a women’s lingerie shop on Main Street, said her business did not take a similar jump in sales comparable to the overall 9 percent increase seen in the numbers released by the town and the tax department.
“It is encouraging for our community that the overall Manchester sales tax numbers were up for Q1 2015, however, my shop did not share that trend and I saw reduced foot traffic and sales compared to last year,” she stated in an email.
“I know the hotels and restaurants were full, but I did not find that the crowds translated to increased shopping — at least not at my store. My best guess would be that sales of ‘cold weather’ related items contributed to the increase in the sales local option tax.”
Statewide, the pictured was more mixed, with some of the 14 towns in Vermont which impose local option taxes — and not all impose them across the board on sales, meals and rooms — posting comparable results while others lagged.
Wilmington saw a jump of nearly 30 percent in combined sales and meals option taxes, with revenues surging from more than $246,000 to $329,000.
Killington’s numbers improved from $828,000 to $876,000. South Burlington and Williston posted the highest overall totals, with revenues of $ 3,613,345 and $2,980,782 respectively, according to the state tax department.
