Sales tax numbers down, tourism taxes up in 2016

Published 12:10 am Sunday, July 9, 2017


The Natchez Democrat

NATCHEZ — Certain tax collections data may indicate an uptick in tourism during 2016, Natchez’s tricentennial year.

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Though general sales tax collections decreased by about 2 percent compared to the year prior — $5,456,818 in 2016, down from $5,555,713 in 2015 — the so-called tourism sales tax collections actually showed improvement.

Collections for the city’s “heads on beds” hotel and bed and breakfast occupancy tax for 2016 increased by about 6 percent from 2015 collections. The state reported $397,669 of “heads on beds” collections for Natchez in 2016, up from $376,043 in 2015.

The tax levies $2 for every hotel and motel room — including bed and breakfasts — booked within city limits. Based on the $21,626 increase, the data indicates approximately 10,813 more rooms were booked in 2016.

A second group of tourism sales taxes, a 1.5-percent restaurant tax and a 3-percent lodging tax, also increased in 2016. The restaurant/lodging collections totaled $1,328,328 in 2016, up roughly 3 percent from $1,289,506 in 2015.

Combined, general sales tax, restaurant/lodging tax and “heads on beds” tax figures experienced about a 1-percent decline in 2016.

Natchez Tourism Director Jennifer Ogden Combs said the tourism-related tax numbers bode well for the future.

“The report for ‘16 — we were happy with the fact that (the numbers were) trending up for the most part even though the population was declining and hotel rooms were declining,” Combs said.

Natchez Inc. Executive Director Chandler Russ said the decrease in 2016 sales tax collections overall stemmed from an abnormally high amount of collections in 2015.

The “anomaly” of 2015, Russ said, resulted from macro-level capital projects, including one that brought a von Drehle production facility to Natchez. Russ said the paper products company invested roughly $140 to $150 million in the project.

While Russ said this construction cycle drove up sales tax collections and overshadowed the effects of a declining oil and gas industry in 2015, the same could not be said for the following year.

“You’ve got a very robust 2015, and then you’ve got 2016 that doesn’t have that level of capital expenditures going on, as well as the oil and gas economy having its full effect (in 2016),” Russ said.

Despite the decrease in general sales tax and combined sales tax collections, Combs said the numbers are encouraging because the restaurant/lodging and “heads on beds” taxes are more indicative of tourism’s health within the city.

“There are so many factors that affect sales tax numbers other than tourism,” Combs said.

Combs said general sales tax numbers also account for the spending habits of residents, which makes measuring tourism difficult using that metric.

The “heads on beds” tax, on the other hand, more successfully isolates tourists since hotels and motels typically serve transient guests.

These numbers could be the best bet at tracking tourism, as no data exists regarding actual numbers of tourists that visit Natchez, Combs said. Combs, however, definitively said marketing efforts from the past few years have paid off for the city.

“What we do know is as a result of the press and public attention and publicity of everything that came out last year, there is an awareness of Natchez that has increased exponentially,” Combs said.

Combs said upticks in tourist activity during parts of 2016 correlated with tricentennial-related events, such as Natchez’s 300th birthday celebration in August or the Navy Week festivities in September.

While encouraged, Combs said officials would not rest on their laurels and must continue to focus on marketing Natchez going forward.

Russ, too, said he believes tourism experienced growth in Natchez recently, but he stressed that balance is the key to future progress.

“I think that it’s an indication that the regional economy is extremely diverse … In order for us to have good, solid growth, we’ve got to have balance in all sectors,” Russ said.