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Fountain Hills reports mixed Q3 revenues; retail and tourism categories show gains
Summary
Town finance officials reported third-quarter FY2025 revenues: townwide taxable activity down ~2.8% year over year but retail, remote sellers and services (tourism) categories showed gains; staff noted the February contraction and the state-driven change to the long-term residential rental tax.
Town finance staff presented a third-quarter fiscal 2025 revenue update to the Fountain Hills Town Council, reporting mixed results across categories and explaining reasons for month-to-month variability.
Paul, the town finance presenter, said total taxable activity for the third quarter was about $192 million, roughly 2.8% lower than the prior year, driven in part by a weak February; however, the town remains about 14% above its conservative year-to-date projections.
Key figures presented by Paul included: - Transaction Privilege Tax (TPT) collections of about $5.5 million for the period, roughly $1 million above conservative projections but down 1.5% from the prior year. - Retail sales local sales tax of about $3.0 million, about $330,000 more than projected and nearly 2% above the prior year when excluding food tax. - Food tax revenues were described as essentially flat and a potential concern because food prices typically rise. - Remote sellers (online sales) rebounded in quarter 3 with a roughly 17% increase after an earlier dip. - Construction sales tax declined about 26% compared with the prior year but cumulative receipts for the first nine months totaled about $1.9 million, exceeding conservative full-year projections. - Restaurants and bars produced $430,000 in local sales tax receipts for the quarter, about $71,000 more than projected and roughly 9% above the prior year. - Leisure and tourism–related services (lodging, short-term stays, golf) were strong in the quarter: $765,000 collected versus $419,000 projected, a year-over-year increase near 35%.
State-shared revenues were largely on target: state sales tax shared receipts totaled about $930,000 for the quarter, income-tax shared receipts about $1.26 million, and vehicle-license tax receipts were surprisingly about $346,000 (roughly $40,000 more than projected).
Finance staff noted the state removal of the long-term residential rental tax beginning January 2025 affected real-estate-related collections and explained February’s contraction was the first month reflecting that change. Paul invited questions; council did not take action on the report, which will inform upcoming budget and CIP discussions.
