During the first two months of collection, Fulton's new use tax collected $26,000, according to Fulton's chief financial officer.
Fulton voters approved the use tax, which applies to purchases made online from vendors located outside Missouri, in June. The tax applies only to individuals whose annual purchases total more than $2,000, and the first $200,000 in use tax revenue each year will go to police and fire capital improvements.
The use tax rate is pegged to the city's sales tax rate, currently 2.5 percent.
Fulton's Chief Financial Officer Kathy Holschlag said the present rate of collection would project $159,000 during the use tax's first year. However, collections are unlikely to remain that low, she said.
During a Fulton utility board meeting Monday, Fulton Director of Administration Bill Johnson pointed out collection on a new tax is always slow to ramp up.
"I think it'll be more than $160,000 at year's end," Holschlag said during Tuesday's City Council meeting.
Johnson said the city's research indicated they could expect $280,000 in annual revenue from the use tax.
"With all the online shopping people are doing, I think we're going to do pretty well," he said.
The city's sales tax revenue is exceeding expectations, despite a rocky year. As of December, with 11 months of collection recorded, Fulton was 2.8 percent ahead of its collections compared to the same point the previous year.
"The sales tax generated is projected to cover the debt service on the rec center," Johnson said, adding, "It's going to be close."
Fulton funded just less than $4 million of the total cost in its 2020 budget but sought a $5 million, 15-year loan to fund the rest. The option selected by council members in June is a lease-purchase agreement with The Callaway Bank and Central Bank, with the interest rate locked at 3.1 percent for the first 10 years. After that, the interest is capped at 5 percent for the rest of the loan's term.