Northampton Sales Tax Revenue Increases

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By Stefanie Jackson – Northampton County’s fiscal year 2022 budget, which will take effect July 1, is projected to top $32 million – nearly a $1.8 million increase from the current fiscal year – due in part to additional revenue from an unexpected source.

Northampton’s sales tax revenues are expected to increase by nearly $500,000 next year – a surprise to Finance Director John Chandler. He predicted a 25% decrease in sales tax revenue this year due to COVID-19, but he has seen an 18% increase so far.

Chandler believes the unexpected increase in sales tax revenue can be attributed to local residents staying home and shopping online instead of traveling long distances to stores in Salisbury, Md. and across the Chesapeake Bay.

Shopping online to contribute to the local economy may seem counterintuitive, but 1% of the 5.3% sales tax on items ordered online and shipped to Northampton is shared with the county.

Northampton’s sales tax rate will effectively be raised from 5.3% to 6.3% starting July 1. Citizens voted in favor of an additional 1% sales tax in November 2020, which will fund renovations and new construction at Northampton High School.

The new sales tax rate will expire in 20 years, when the loan for the high school project is repaid.

The 1% sales tax is projected to raise between $1 million and $1.5 million in FY 2022 for school capital improvements, Chandler said.

Real estate taxes, Northampton’s largest source of revenue, are expected to top $15 million next year, a gain of nearly $425,000. Delinquent real estate taxes will supply nearly $518,000 in additional revenue.

Personal property taxes are expected to surpass $2.4 million, a gain of more than $214,000.

But not all of the revenue budgeted for FY 2022 is from taxes or other income.

The county budgeted more than $1 million from its “savings account” for the current fiscal year to pay for COVID-19-related expenses, and it will budget more than $600,000 from the same fund in FY 2022 to make sure the bills are paid.

“There’s some good things here, but there’s a lot of expenses,” Chandler said.