Colorado Springs sales tax collections edge up slightly in March

Apr. 20—Colorado Springs sales tax collections eked out a slight gain in March, though it was one of the smallest percentage increases since the initial stages of the COVID-19 pandemic.

In March, the city collected just shy of $16 million in sales tax revenues, up 0.3% when compared with the same month a year ago, according to a report this week by the Colorado Springs Finance Department.

Last month's increase was the smallest since a 0.1% bump in August 2020, Finance Department reports show. Also, sales tax increases in each of the last four months have been on the modest side — 1.4% or less on a year-over-year basis.

The city levies a 2% sales tax on retail purchases of TVs, appliances, motor vehicles, clothing and other retail items. That tax is a key revenue source for Colorado Springs government because it pays for more than half of the city's annual general fund budget that includes parks, roads, public safety and other basic services.

The city's sales tax also is a closely watched economic indicator; generally speaking, when sales tax revenues are strong, so is the local economy.

The March sales tax report, which reflects business and consumer spending that took place mostly in February, also showed:

— Year to date, city sales tax revenues total $32.1 million, up 0.8% from the same time last year.

— Of key retail categories tracked by the city, the biggest percentage revenue increases in March included auto repair and leases, up 10.9%; miscellaneous retail (online sales, sporting goods stores and pet supply shops, among others), 9.9%; hotels and motels, 9.5%; restaurants, 9.4%; utilities, 6.8%; grocery stores, 5.7%; and auto dealers, 4.9%.

— Major retail sectors that saw percentage drops in year-over-year sales tax revenues in March included furniture, appliances and electronics, down 18.2%; medical marijuana, 15.3%; building materials, 13.7%; and department and discount stores, 2.6%.

— The city's use tax, collected on the purchase of equipment and machinery purchased outside Colorado Springs, generated $590,425 in March, a 5.6% year-over-year increase. So far this year, use tax revenues total $1.5 million, up nearly one-fourth over the same time in 2022.

— Revenues from a separate city tax on auto rentals and hotels stays, which point to the health of local tourism, totaled $522,501 in March, a 5.1% increase compared with the same month last year. Year to date, auto rental and lodging tax revenues totaled $992,843, an 8.9% year-over-year jump.