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November sales tax numbers reveal slow start to holiday season

By: WAYNE HEILMAN wayneh@gazette.com
January 27, 2014 Updated: January 27, 2014 at 3:25 pm
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The holiday shopping season for Colorado Springs retailers started more slowly in November than it did in 2012, according to the latest sales tax collection report from the Colorado Springs Finance Department.

Revenue collected in December from the city's 2 percent sales tax - levied on such things as vehicles, appliances, furniture, clothing, building materials and other items - rose 5 percent from a year earlier to $10.1 million, the second consecutive monthly increase after a slight decline in October. That monthly drop was the first in nearly two years.

December collections reflect sales made in November, the traditional start of the holiday sales season that kicks off on the day after Thanksgiving, almost a week later than usual.

Sales tax collections last year were up 5.6 percent from 2012 to $114 million.

Comparatively, sales tax collections in December 2012 were up 11.8 percent from the previous year and the biggest monthly gain in more than five years.

Use tax, collected on manufacturing equipment, building materials and other items bought outside the city, fell slightly in December from a year earlier to $707,052, though the December 2012 total was inflated by more than $200,000 in payments resulting from audits of merchants. Use tax collections last year were up 12.6 percent to $8.06 million.

Combined sales and use tax collections in December were up 4.7 percent from a year earlier to $10.8 million, and for last year increased 6.1 percent from 2012 to $122.1 million. That total doesn't include special sales taxes for public safety, tourism and trails and open space, which totaled $34.3 million.

Why it's important: Sales and use tax collections fund more than half of the city's budget for police and fire protection, roads and other services. Sales tax also is a primary measurement of consumer spending, a key barometer of the local economy.

The breakdown: Categories with the largest percentage increases in December from a year earlier were grocery stores, up 36.2 percent; commercial machines, up 32.5 percent, and auto repair and leases, up 13.5 percent. The only categories that declined were business services, down 17.4 percent, and department and discount stores, down 2.9 percent.

Medical marijuana: Sales tax collections from medical marijuana businesses in December rose 9.4 percent from a year earlier to $107,373, the smallest year-to-year increase in nearly two years. The total for the year was up 24.4 percent to $1.23 million.

Tourism tax: December collections of the city's tax on hotel rooms and rental cars rose 4.3 percent from a year earlier to $255,786, the first monthly increase since September. The total for the year increased 3 percent from 2012 to $3.82 million.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

Facebook Wayne Heilman

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