2009-10 Adopted Budget - City of Hoquiam

Sales Tax AllocationTelecommManufactOtherApparelMisc StoreFuelNon StoreAutomotiveFurnitureDrugsElec & ApplRestaurantsFood Construct LumberRetail SalesCategory Amount PercentAutomotive $2,665,934 4%Furniture $977,370 2%Elec & Appl $857,756 1%Lumber $5,308,030 8%Construction $7,276,702 12%Food $4,144,424 7%Restaurants $7,844,711 13%Drugs $523,669 1%Fuel $11,507,551 18%Apparel $569,401 1%Manufact $6,036,633 10%Telecomm $3,339,642 5%Other $8,729,591 14%Misc Store $1,793,848 3%Non Store $907,247 1%$62,482,509Market Characteristics: It is estimated that the City captures only 5% of residents'apparel purchases, 16% of furniture and household purchases, but over 80% ofrestaurant purchases. While the capture rate for restaurants seems high, it is realisticwhen you consider not only restaurant purchases by Hoquiam residents, but also thenumber of non-residents that work in Hoquiam and subsequently dine there.The retail dynamics of Hoquiam are not easily comparable to other cities due to the factthat the City of Aberdeen has a commanding retail presence and is only a short driveaway. However, there is significant unmet potential for additional sales in Hoquiam.Hoquiam Retailers: Although Hoquiam has a downtown shopping area and acommercial strip on the east side, it has no malls or big box retailers. Over forty percentof our sales tax comes from five businesses including a fuel distributor, large chainrestaurant and a grocery store. The City's dependency upon a relatively few number ofbusinesses is a cause of concern and leaves us highly vulnerable if one of these majorbusinesses moves or closes.Streamlined Sales Tax: The Streamlined Sales and Use Tax Agreement (SSUTA) wasdeveloped to radically simplify and modernize sales and use tax collection for allbusinesses. It includes simplifying tax laws, improving the efficiency of taxadministration, and adopting new technologies that significantly reduce the burden oftax collection.33