Colorado Springs Sales Tax Collections Continue Strong September Streak | Subscriber Content

There was no fading in September for Colorado Springs sales tax collections.

The city’s 2% tax on purchases of televisions, motor vehicles, appliances, building materials and other items generated nearly $20.5 million in revenue last month, or a 7.9% increase from September 2021, according to a report released this week by the city’s finance department. The September report reflects purchases that took place primarily in August.

The city also raised $20.6 million in August and $22.6 million in July — the first time sales tax revenue topped the $20 million mark for three consecutive months, according to city ​​sales tax reports.

“That’s strong growth,” Charae McDaniel, the city’s chief financial officer, said of the September report. “Last year we kind of got used to these double-digit (percentage) increases. Although this is not double digit growth, it is still considered very strong sales tax growth.

Colorado Springs, which has been listed as a best place to live in some national publications, continues to see healthy population gains, and more people mean more purchases of taxable items, McDaniel said.

Although single-family home construction appears to be slowing, apartment construction remains hot, she said; sales taxes on building material purchases are a major contributor to the city’s overall monthly revenue.

These trends helped offset concerns about an impending recession and runaway inflation. In fact, the higher cost of goods and services means that consumers and businesses pay more in sales taxes.

Revenue from purchases at restaurants and furniture, appliance and electronics stores, for example, posted solid increases in September, McDaniel said.

“These types of things are subject to these inflationary cost adjustments that we’ve seen in stores and so, yes, that would certainly increase the sales tax paid on those (items) as well,” she said.

Local economists are watching the performance of the city’s sales tax closely, using it as a measure of the health of the economy.

At the same time, sales tax collections are a key source of revenue for the city government and pay for more than half of the budget for the city’s general fund which funds parks, public safety and other public services. base.

Other takeaways from the city’s September sales tax report include:

• Since the beginning of the year, sales tax collections have totaled $154.4 million, up 8.8% compared to the same period in 2021.

• The retail sectors that posted the largest percentage increases in sales tax revenues included furniture, appliances and electronics, 39.4%; utilities, 30.7%; department and discount stores, 29.04%; catering, 18.7%; miscellaneous retail, 15.2%; and building materials, 13.9%.

• Industries with the largest percentage declines included business services, 43.9%; medical marijuana, 32%; and auto repair and rental, 27.7%.

• The city use tax, which is levied on purchases of out-of-town equipment and machinery used within city limits, totaled $863,011 in September, an increase of 37.7% year over year and the largest percentage increase of the year. Year-to-date, usage tax revenue totaled $6.9 million, a 9.4% peak over the same period in 2021.

• Revenue from the city’s separate tax on hotel rooms and car rentals totaled nearly $1.1 million in September, down 4.2% year-over-year and the first drop in monthly revenue since a 19.6% plunge in March 2021. Still, September revenue from the hotel and car rental tax rose 20.4% from the same month in the pre-pandemic year of 2019.