Retail sales in Iola rose slightly in 2025, contributing to higher sales tax revenues and modest gains in several other local tax categories, according to City Clerk Roxanne Hutton.
The increase continues an upward trend. “They went up a total of $129,000,” Hutton said, a 5% increase. In 2024, the city’s retail sales increased 4%, or $83,000. Total retail sales for the city in 2025 were $2.3 million; they were $2.2 million in 2024.
City sales tax collections reflected that increase. The city’s sales tax revenue rose from $1.54 million in 2024 to $1.64 million in 2025, an increase of more than $106,000. The city’s share of county sales tax also climbed, from $320,552 to $334,849.
HUTTON SAID the growth does not appear to be concentrated in one specific sector, and that new retail options seem to be adding to sales rather than shifting spending away from existing businesses. “I’m seeing Bomgaar’s staying where they were, and the new Waters Hardware store picking up,” Hutton said. “I think they have enough different products that people are buying different things.”
She added that large retailers showed no signs of decline. “I haven’t seen Walmart decrease,” Hutton said. “Its sales are doing nothing but going up.”
Alcohol-related tax revenues also increased in 2025. Alcohol sales tax rose from $26,545 in 2024 to $29,249 in 2025. Hutton noted that Iola’s alcohol-by-the-drink tax is not based on sales volume alone but is tied to population. “We do get an alcohol tax, but it’s based on our population,” she said. Even so, she said revenues held steady with a slight increase.
The city’s transient guest tax saw a notable rise, increasing from $83,596 in 2024 to $88,982 in 2025, a gain of about $5,400. Hutton said the reason for the increase is not entirely clear. “I don’t know if that is more guests or a shorter time frame,” she said, noting that longer stays are exempt from the tax. She added that the revenue from the tax supports community events and facilities. “We always give that out to Farm City Days and the fair,” Hutton said. “Those kinds of organizations. It helps our parks also.”
NOT ALL tax categories increased. Highway tax revenue declined slightly, from $145,630 in 2024 to $143,758 in 2025. Hutton explained that highway tax distributions are based on vehicle registrations within the city, not fuel purchases. “It’s based on how many cars are actually registered within the city,” she said, adding that buying gas locally does not directly affect that revenue stream.
Compensating use tax revenues showed mixed results. The city’s compensating use tax decreased from $255,248 to $249,290, while the county portion increased from $104,296 to $119,289. A compensating use tax is a tax on items bought from out-of-state — online, for example — and then used, stored, or consumed within the home state. The tax ensures the same tax revenue as if bought locally, protecting in-state businesses, and applying when the out-of-state purchase had no sales tax or a lower rate.
City officials are still waiting on complete data for early 2026 sales, as January figures are not reported to the state until February and distributed to the city in March. Hutton said she is interested to see how recent changes, including business closures early in the year, may affect future numbers.
