Colorado Springs sales tax collections surge in April

May 24, 2013 Updated: May 24, 2013 at 3:00 pm

Sales tax collections in Colorado Springs surged again in April, the sixth time in the past eight months that collections have risen more than 8 percent from the same month a year earlier, according to a report Thursday from the city's Finance Department.

Collections last month, based on sales in March, were up 8.94 percent from a year earlier to $11.1 million. Sales tax collections are up nearly 10 percent so far this year.

Much of April's gain, however, came from audits of merchants. Without the onetime gain of $1.05 million from audits, April sales tax collections would have been up 3.67 percent from a year earlier.

Tom Binnings, a senior partner with Summit Economics LLC, said the weak gain without the audit revenue could reflect the initial impact from automatic federal budget cuts that began in March, triggering layoffs by some defense contractors and reducing travel by federal employees.

Use tax collections in April - collected on manufacturing equipment, building materials and other items bought outside the city - nearly doubled from the same month a year earlier and were the highest for any month since July 2009 at $1.23 million. Without $639,350 from audits, use tax collections would have risen just 4.35 percent. Combined sales and use tax collections in April were up 13.77 percent to $12.4 million, but would have been up 3.67 percent without revenue from audits.

When adjusted for inflation, combined sales and use tax collections year to date are the highest since 2007, according the Finance Department.

Why it's important: 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.

The breakdown: Industry categories showing the greatest percentage increases in April were groceries, up 95.52 percent from a year ago; furniture, appliances and electronics, up 18.05 percent; and miscellaneous retail, up 12.33 percent. Industries with the largest percentage decreases were business services, down 32.53 percent, and auto dealers, down 3.64 percent.

Medical marijuana: Sales tax collections on medical marijuana businesses in April surged 31.37 percent from a year earlier to $109,473, the second-highest monthly total in the more than four years the city has collected sales tax from such businesses.

Tourism tax: April collections of the city's tax on hotel rooms and rental cars fell 0.12 percent from a year earlier, the first year-to-year decline since October.

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