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City of Norman finance staff credits December use-tax surge for returning use-tax line to positive
Summary
City finance staff told the Finance Committee a strong December use-tax collection brought the city’s use-tax account back into the black for the fiscal year, while sales tax remained essentially flat (about –0.5% year‑to‑date). Council members asked the state for more detail on unreported online sales after staff cited reporting gaps linked to South Dakota v. Wayfair.
Mister Francisco, a city finance staff member, told the City of Norman Finance Committee on Dec. 18 that a strong December use‑tax collection "got us back into the black" for the fiscal year while sales tax remained "negative 0.5% for the year." Francisco said the monthly results meant the city’s use‑tax receipts are now positive for the fiscal year after recent volatility.
Why it matters: Use tax funds and sales tax trends help shape budget decisions and the city’s capacity for services. Council members pressed staff for clarity about the degree to which the city can rely on use‑tax projections in upcoming budget allocations.
Francisco told the committee the city is confident that companies and online retailers that voluntarily comply with state reporting are reporting properly, but he said there is an unknown compliance gap tied to sellers that fall below thresholds set by South Dakota v. Wayfair. "What we're not confident in is those retailers that are fitting through the loophole…where if you have less than a $100,000 worth of sales in the state, then you don't have to collect sales tax," Francisco said, noting that some local deliveries may not be captured.
Mayor Allen and other members framed the month in historical context: one council member noted this December was the second‑best December in the last eight fiscal years, behind last year’s record month, and cautioned against interpreting year‑over‑year drops relative to unusually high recent peaks.
Council members also asked for additional detail on how use‑tax data flow from the state to the city and whether the state could provide a compliance health check. Francisco said the city will follow up and requested that the committee ask the state tax commission for data or clarification on reporting coverage.
On overtime and fund tracking, committee members sought to distinguish hours from dollars. Finance staff said the packet tracks expenditures (dollars) and that hours per employee are available in payroll systems under supervisors’ control but are not publicly disclosed. Staff explained that public‑safety overtime is recorded in the Public Safety Sales Tax fund (fund 15) and that the packet shows division‑level overtime expenditures by department.
What’s next: Members agreed to ask the state for more information about use‑tax reporting and the size of any unreported segment. Francisco offered to provide follow‑up information on overtime reporting mechanics and which supervisors could answer payroll‑level questions.
