Marksville loses 1-cent sales tax; will seek voter approval in May
Marksville has been thrust into emergency belt-tightening mode due to the fact that a 1-cent sales tax for streets, sewer and water operations has expired and can no longer be collected.
“We were told this type of thing happens more often than you would think,” city Secretary/Treasurer Heather Brevelle said.
The sales tax should have been put before the voters for renewal in 2018. It wasn’t. The tax expired Jan. 1, 2019, but was collected last year.
It is not known whether the city must somehow repay the $1.8 million it collected after the tax expired.
ELECTION IN MAY
The City Council discussed the emergency at its Jan. 8 meeting, deciding it will present a resolution at the Feb. 12 meeting to put the 1-cent sales tax on the May 9 ballot.
If approved, the resurrected tax could begin being collected again on July 1, which is the start of the municipality’s budget year.
Under the city charter, each alderman also serves as a commissioner over a city department. They will meet with department heads over the coming weeks to find ways the city can save money until July.
The 1-cent tax has been collected for about 40 years. It generates about $1.8 million a year.
The city is immediately facing a $900,000 hole in its piggy bank due to the loss of the sales tax for the next six months.
If voters reject the tax in May, the city might need to make additional budget cuts to cover the lost revenue.
On the “positive” side of the issue, consumers making purchases in Marksville could save 1 percent on their purchases that are subject to sales tax.
Perhaps more importantly, Marksville residents making large-item purchases such as vehicles could save a few hundred dollars if the purchase is made before a new sales tax is approved.
For example, a Marksville resident buying a $40,000 car would save $400 now compared to the total price tag in July if the tax is restored.
The snafu could force merchants to change their accounting system to reduce the amount of sales tax to be collected on purchases. Merchants would then be faced with changing the systems back to include the new sales tax should voters restore the lost tax in May.
“I assume they will be mailing out notices,” Harvest Food’s Scott Key said. “I have not received word of this. We can’t make the changes at the register if we don’t know about it.”
Marksville still collects two 1/2-cent sales taxes -- one dedicated to street and drainage improvements and one to support public safety departments.
Neither of those is set to expire in the near future.
PINE PRAIRIE’S CASE
Marksville’s situation is similar to that of the Village of Pine Prairie, where a 2-cent sales tax expired and was collected for a year before the error was noticed.
In that case, the municipality was allowed to keep the tax revenue it had collected. Pine Prairie put the 2-cent sales tax on the March 30, 2019 ballot, when 97 percent of voters approved the tax.