Town leaders in Little Elm have devised a unique plan to stay competitive with sales tax revenue: They are actively encouraging residents to pick up their smart phones and laptops and shop online more often.
“There is a reality in Little Elm. We are never going to be a retail giant. We are never going to have that commercial base that our neighbors have,” Mayor David Hillock said. “Frisco has well over 10 million square feet of retail. We won’t ever get there.”
Hillock said residents are still encouraged to buy everything they can with local merchants in town limits, but for everything they can’t find, purchase it online instead of traveling to a nearby city.
“So, if you go to Amazon.com and place an order, the town receives its portion of the sales tax,” he said. “You are still contributing back to the economy as if you had driven to the store.”
Hillock explained that sales tax revenue is important to the town and the citizens.
“[It’s] two and a quarter cents per dollar and it’s huge for us,” he said. “That pays for parks. That pays for our police, our fire department. Everything that we do as a community comes from a combination of those sales taxes and other revenue that the town brings in."
The push to point, click and purchase extends to everything from clothing to groceries.
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“There are some retailers, especially smaller retailers on the internet, that don’t necessarily do what they are supposed to do when it comes to paying taxes,” Hillock warned. “So, we do encourage folks to go to the larger retailers or more well-known retailers.”
Hillock said he has already seen a difference since the push started.
“We had a 12 percent increase just in Walmart.com orders in the last year,” he said. “Little Elm is probably one of the few communities is Texas that does not have a Walmart. There are several on our borders, but if you go to Walmart.com, that purchase gets delivered to your house and Little Elm gets the sales tax.”
Why aren’t more cities using this strategy?
“I think there is a fear of insulting local businesses. One of the really great things about Little Elm, we have very few of those,” Hillock laughed. “So, the reality is we’re not going to have that retail base because of our proximity to other communities.”
