Page 60 - Grapevine Budget FY21

Sales & Use Taxes are the largest General Government revenue stream, at 35%. This category
contains both sales and mixed beverage taxes. Sales tax receipts are the result of a tax levy on the
sale of goods and services within the City as authorized by the state of Texas. The maximum sales
tax allowed in the City of Grapevine is one cent per dollar on all goods and services deemed
taxable. Alcoholic beverage taxes are the result of mixed beverage and private club registrants
remitting a 14% mixed beverage gross receipts tax to the state. The state then remits 8.3065% of
those taxes to the City. Combined sales and use taxes represent 45% of total general fund
revenues, up from 43% the previous year.

SALES TAX FY-2015 FY-2016 FY-2017 FY-2018 FY-2019 FY-2020

Collections $27,306,949 $28,314,649 $27,153,906 $28,286,627 $29,863,646 $25,758,869
Gain / (Loss) $930,252 $1,007,700 ($1,160,743) $1,132,721 $1,577,019 ($4,104,777)
% Change 4% 4% -4% 4% 6% -14%

General government sales tax receipts for FY 21 are projected at $26.4 million, a decrease of $4.2
million (14%) from the previous year. Annual collections in FY20 fell 14%, but the current
economic climate suggests no growth for the upcoming fiscal year.

The Sales Tax Strength Index, which compares the 12-month and 36-month rolling averages of
sales tax collections has proved to be a reliable early indicator of recessions. The chart above
examines the index for sales tax collections from September 2014 through September 2020. In the
early part of the period, sales tax growth was around 5% until February 2016, when it fell to 2.4%.

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