Colorado Springs News, Sports & Business

Gazette Premium Content Colorado Springs sales tax collections inch upward in March

By Rich Laden Updated: April 19, 2014 at 6:02 pm

Colorado Springs sales tax collections - a key revenue source that funds city government spending - rose slightly last month, continuing an early trend of slow gains in 2014.

Sales tax revenues totaled $9.1 million in March, a 1.1 percent increase over the same month a year earlier, according to a report by the city's finance department. March collections reflect purchases made in February.

Last month, sales tax revenue rose by 0.6 percent on a year-over-year basis. Year to date, sales tax revenues are up 0.8 percent over the same period last year.

Fred Crowley, an economist at the University of Colorado at Colorado Springs, called March's numbers "a little disappointing."

The city levies a 2 percent sales tax on purchases of motor vehicles, appliances, electronics, furniture, clothing, building materials and other items.

Some of those categories showed year-over-year percentage gains in March. Among them: Revenues from grocery store sales increased 9.9 percent; clothing stores rose 7 percent; and building materials climbed 5.8 percent.

Still, year-to-date, sales tax collections from clothing stores, department and discount stores, business services and sales of commercial machines are all down compared with the same period a year ago, leading Crowley to be unimpressed with the pace of sales tax collections.

One possible factor: Lower prices charged by big-box retail stores mean the city collects less revenue on those purchases, Crowley said.

"As a consumer, I appreciate the value of a big box," Crowley said. "But as a municipal entity, I have to be disappointed in the value of a big box."

Meanwhile, the Springs collects no sales tax on consumer purchases at growing numbers of stores in unincorporated Falcon, Monument, Fountain and other areas outside the city.

Also, cities such as Colorado Springs don't collect sales tax from on-line purchases, Crowley said.

"The Internet keeps growing," he said. "People are buying things on the Internet and not paying local taxes."

Sales tax collections are closely watched by Springs officials, who rely on them in large part to fund city spending for public safety, roads and other services. Economists, meanwhile, track sales tax revenues to measure the health of the local economy.

Other highlights of the city's March report include:

- The city's use tax - levied on equipment and machinery purchased outside of town, but used inside city limits - totaled $490,192 in March, a 39 percent drop from the same a year earlier. Year to date, use tax revenues of $1.6 million are up 23.4 percent over the same period in 2013.

Combined sales-and-use tax revenues of $9.6 million in March were down 2.2 percent over the same month a year ago. Year to date, combined sales-and-use tax revenues totaled $19.9 million, up 2.3 percent over the same period last year.

- Revenue from the city's tax on hotel rooms and auto rentals totaled $241,727 in March, an 11.8 percent year-over-year gain. Year to date, tourism tax revenues of $439,553 are up 6.9 percent from the same period a year ago.

- The city's combined sales- and-use tax on medical marijuana sales produced revenues of $119,359 in March, up 12.5 percent from the same month last year. So far this year, medical marijuana revenues of $233,418 are up 16.5 percent from a year ago.

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Contact Rich Laden: 636-0228

Twitter @richladen

Facebook Rich Laden

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