Colorado Springs records solid sales tax revenue gains

Bill Radford, The Gazette (Colorado Springs, Colo.)
·2 min read

Nov. 25—Colorado Springs saw solid sales tax revenues in October as it heads into the critical holiday shopping season.

Sales tax collections in October tallied nearly $22 million, a 5.83% percent increase over October 2021, the city's Finance Department reported this week. It was the fourth straight month that revenues from the city's 2% sales tax topped the $20 million mark. The October collections reflect purchases that took place mostly in September.

Through October, sales tax collections are up 8.38% from the same period last year. Sales tax collections are a key revenue source for city government, paying for more than half of the city's general fund budget that finances parks, public safety and other basic services.

"We're pleased with the collections coming in," said Charae McDaniel, the city's chief financial officer. "It is a strong month again. We have obviously been having a number of them in a row."

Retail sectors that showed the largest percentage increases in sales tax revenue in October included furniture, appliances and electronics, up 23.86%; utilities, 23.44%; and restaurants, 20.23%.

Increases in areas such as furniture, appliances and electronics may reflect not just that people are buying more, but that they are paying more because of inflation, McDaniel said. "The cost of things has gone up as well, which I think is part of the increase that we are seeing."

Those sectors with the biggest percentage declines included business services, down 51.10%; medical marijuana, 26.07%; and auto repair and leases, down 17.10%.

Sales tax revenues from building materials were essentially flat, up 0.84% from October 2021. For the year, though, sales tax collections on building materials are up 13.79% from the same period last year. Homebuilding has slowed sharply in recent months as mortgage rates have climbed.

In other highlights from the city report:

— Use tax collections were up 43.06% for the month and are up 13.10% year to date. Use tax is levied on items that businesses purchase from outside the Springs for use inside city limits

— Revenue from the Lodger's and Auto Rental Tax rose 12.8% in October from October 2021 and is up 18.22% year to date from the same period last year.