Revenue rose sharply in spring

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MANCHESTER — Good news from the tax collector? It's possible.

Manchester's "local option" tax revenues — the 1 percent levy the town collects on hotel rooms, meals, alcoholic beverages and some sales (excluding clothing) — shot up by about 10 percent for the three months ending June 30 over the same period a year ago, Town Manager John O'Keefe announced.

But it remains to be seen how much of the sales tax increase can be attributed to the collection of taxes from online purchases, and which were assessed in Manchester's shops and boutiques.

Either way, the increase was welcome. "Five [percent] would have been excellent," O'Keefe said.

The town collected $275,081 in sales taxes for the three months ending June 30, a 9.9 percent increase over the amount collected for that three month period in 2016.

Room and meal tax revenue rose by 10.4 percent over the same period in 2016, to $128,764.

According to O'Keefe, some business owners say it's possible that the revenue growth in sales tax revenue can be attributed to the town collecting local option sales tax on online purchases.

Chris Morrow, the co-owner of the Northshire Bookstore, is among those who have doubts about using local option revenues as an economic indicator.

"We had a good quarter. But remember, this is the first quarter that Amazon has been collecting taxes," Morrow said. "So the local option tax is no longer a good barometer of local business health."

Regardless, the number still went up, O'Keefe said. "And I can't imagine that 10 percent of that is related to Amazon and other online retailers," he added, noting that the similar rate of growth in the meals and rooms tax revenue suggests a spike in visitor spending.

And that's despite the new Hampton Inn and Suites opening in July, rather than on Memorial Day weekend as originally hoped. "It will be interesting to see what happens next quarter because of that," O'Keefe said.

Local option meals and rooms tax revenue in has, with little exception, increased steadily quarter by quarter since fiscal 2015. First quarter rooms and meals revenue, now $128,764, was $95,075 for the three months ending June 30, 2014.

It will take more for that growth to continue in the second quarter, as the benchmarks are higher. Second quarter revenue in meals and rooms has risen from $172,448 in 2014 to $209,4876 last year.

While the revenue figures no longer reflect clothing sales — for decades, a vital part of the town's retail sector — Lana Hauben of Manchester Designer Outlets is happy to see that sales revenues are up overall.

"There's a world around us. There's what's going on in the U.S., what's going on in Vermont, and then there's Manchester, which is a very unique situation," Hauben said. "We have, despite the closing of some stores, a fabulous group of brands — which have reported extremely strong sales over the sidewalk sale weekend. We are thrilled about that, we are constantly talking to prospective tenants, and when sales are good, brands talk to each other."

Hauben thinks the digital and multimedia ad campaigns promoting MDO and Manchester are working, and pointed out recent positive coverage in the media about the town and its outdoor and cultural offerings.

"I'm not looking at this through rose-colored glasses," she said. "There are challenges in the world now and compared to what's going on in the world. We should thank our lucky stars that we are here."

Reach Journal editor Greg Sukiennik at 802-490-6000.


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