The City of Rio Rancho’s gross receipts tax income to the general fund this month was lower than last October but higher than estimates, according to the city.
The gross receipts tax (GRT) revenue to the general fund was a little more than $2.1 million this month, 4 percent above the monthly estimate, according to a report from Financial Services Director Olivia Padilla-Jackson. That distribution is based on August economic activity.
Gross receipts taxes are imposed on income from the sales of goods and services. Businesses must pay them and often pass the expense on to customers in the form of higher prices.
In August, the GRT revenue to the general fund dropped significantly, causing worries about how the city would pay its bills if the drop became a trend. However, September’s distribution came in so far above estimates that it made up for two-thirds of August’s drop.
According to the report, this month, the total distribution was 3.6 percent lower than October 2012.
To date this fiscal year, GRT income is down 1.3 percent compared to last year. However, taking into account savings from refinancing GRT bonds at a lower interest rate, the revenue is 1.1 percent higher than this time last year, according to the report.
Out of 22 economic sectors, 12 fell compared to last October, while 10 rose.
Compared to last October, according to the report, there was little change in the broad retail category. But the broad services category GRT income to the general fund rose about 15 percent above a year ago.
To date this fiscal year, retail GRT is a little lower than last year, but services gross receipts tax income is up about 8 percent, according to Padilla-Jackson’s report.
Within the services sector, information and cultural services GRT went up 12 percent above last fiscal year, while health care-related services produced 10 percent more income. The administration and support sector gross receipts tax revenue is 57 percent more than this time last year, and education services has GRT revenue 51 percent higher, according to the report.
On the other side of the services sector, professional scientific and technical services brought in 13 percent less this fiscal year to date.
For the construction sector, the GRT distribution was almost $140,000, or 27 percent, lower than October 2012 and 4.2 percent lower to date compared to last fiscal year. However, according to the report, the income is line with the monthly average for construction GRT this fiscal year.
“After averaging $90,000 in each of the last six months, and experiencing some large swings over the last few months, the manufacturing distribution returned to the more recent averages at $112,618,” Padilla-Jackson wrote in the report. “Manufacturing companies are now remitting GRT on various utility expenditures, including electricity, instead of the utility companies. Timing of these tax payments led to the large swings seen over the last few months.”
Finally, the utilities gross receipts tax income fell 36 percent this month compared to last October and about 35 percent this fiscal year to date compared to last fiscal year.
A primary reason for the decline is that manufacturers, not utility companies, are paying gross receipts taxes on electricity used in their processes. Demand related to weather and other factors may also have impacted the taxes paid, according to the report.