Colorado Politics

Colorado Springs sales tax revenues rebound in June from a weak May

Colorado Springs sales tax revenues rebounded in June after a rare stumble in May.

Last month, revenues collected by the city from its 2% levy on cars, appliances, TVs and other retail purchases totaled almost $19.6 million, a 4.1% jump from June 2022, according to a recent report from the Colorado Springs Finance Department.

June’s percentage gain in collections was the largest since November of last year and quickly reversed May’s performance, when sales tax revenues sank by 6.3% on a year-over-year basis. May’s drop was the first revenue decline since June 2020, a few months after the onset of the COVID-19 pandemic.

Since the initial economic downturn triggered by the pandemic, when many nonessential businesses were required by the state to close or curtail operations, monthly Colorado Springs sales tax collections generally have seen healthy gains on a year-over-year basis, including during much of 2022 when compared with 2021.

Colorado Springs officials closely monitor the sales tax and its performance because it pays for more than half of city government’s general fund spending, which includes parks, roads, public safety and other services.

Highlights of the June sales tax report include:

? Year to date, city sales tax collections now total $90.8 million, almost unchanged from the same period in 2022.

? A majority of the 14 retail categories tracked by the Finance Department in its report saw year-over-year percentage gains in revenue during June. Business services led the way with a 56% gain. Other categories that saw increases included department and discount stores, 23.6%; auto repair and leases, 9.8%; furniture, appliances and electronics, 9%; grocery stores, 8.3%; miscellaneous retail, which includes online purchases and those at book shops, sporting goods stores and others, 8.4%; restaurants, 6.7%; and clothing stores, 1.4%.

? Retail categories that saw declines in June included medical marijuana, 15.9%; building materials, 4.9%; and auto dealers, 4%. In part, the decline in building materials reflects a slowdown in the construction of single-family homes, local economists have said.

? The city’s use tax, which is levied on out-of-town purchases of equipment and machinery, totaled $858,742 in June, up 0.5% from the same month in 2022. Year to date, use tax revenues now total $4.2 million or 9.2% higher than the same period last year.

? Revenues from the city’s separate tax on hotel rooms and rental cars dipped by 2% in June to $862,339, compared with the same month last year. Year to date, the bed-and-car tax totaled $3.3 million, down 4.4% from the same period in 2022. The tax generally is considered to be one indicator of the area’s tourism activity.

Colorado Springs sales tax collections, which had fallen in May for the first time in three years, rebounded in June, according to a city Finance Department report. THE ASSOCIATED PRESS FILE
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