Colorado Springs sales tax collections surged for a second consecutive month in October, the city reported Thursday.
The October collections, totaling $11.16 million, reflect purchases made in September and were up 9.32 percent from a year earlier, the biggest year-over-year jump since March. Sales tax collections so far this year are up 5.35 percent from the same period a year ago. The October tally is the highest monthly total on record outside of January, a month that reflects the height of holiday purchases in December.
Collections of use tax were up just 1.76 percent in October from a year earlier; use tax is collected on manufacturing equipment, building materials and other items bought outside the city for use in the city. Combined sales and use tax collections for October rose 8.84 percent from a year ago to $11.86 million.
Sales and use tax collections fund more than half of the city’s annual budget for police and fire protection, roads and other services. Sales tax also is a primary measurement of consumer spending, making it a key barometer of the local economy.
The breakdown: Categories showing the greatest percentage increases in October were sales of commercial machines, up 74.55 percent; building materials, up 31.97 percent, and auto dealers, up 16.23 percent. Three categories showed decreases: hotels and motels, down 9.6 percent; business services, down 7.87 percent, and utilities, off 6.2 percent.
Analysis: “It is a good number, but it is being driven by two areas that aren’t sustainable, auto and building material sales,” said Fred Crowley, senior economist for the Southern Colorado Economic Forum. “Some of the activity is from back-to-school sales and some is from soldiers returning to Fort Carson from Afghanistan.”
Collections from sales of furniture, appliances and electronics were up 5.45 percent, which Crowley said was likely driven by people replacing items damaged or destroyed by the Waldo Canyon fire, which destroyed nearly 350 homes in the Mountain Shadows neighborhood in June. The gain from auto dealers likely will continue for at lest one more month — new vehicle registrations with the El Paso County Clerk and Recorder’s Office surged 24.6 percent in October compared with a year earlier to a five-year high of 2,168.
Medical marijuana: Sales tax collections from medical marijuana businesses in October were up 35.32 percent from a year ago to $94.255, but off 15.94 percent from September’s record total. Medical marijuana tax collections so far this year are up 36.69 percent to $793,557.
Tourism tax: October collections of the city’s tax on hotel rooms and rental cars fell for a third consecutive month compared with the same month a year earlier. The October total was down 7.98 percent from a year ago; the total so far this year is off 2.72 percent from 2011 at $3.14 million.
Contact Wayne Heilman: 636-0234 Twitter @wayneheilman
Facebook Wayne Heilman