Amazon fulfillment center (copy) (copy)

A 3.7 million-square-foot Amazon fulfillment center is under construction in the Peak Innovation Park, southeast of Powers Boulevard and Milton E. Proby Parkway near the Colorado Springs Airport. Online sales by Amazon and other retailers helped fuel another big month of sales tax revenue for the city of Colorado Springs.

Surging Colorado Springs sales  tax revenue showed no sign of slowing in the new year as online sales and a hot housing market continued to fuel strong gains in January.

Revenue from the city's 2% sales tax in January jumped 9.6% from a year earlier to $14.2 million, the fifth consecutive month the tax has increased from the same month a year ago by at least 8%, according to a report from the city's Finance Department. The January increase is virtually identical to the year-over-year percentage increase in December, which included much of the critical  holiday shopping season.

"I don't expect this to slow for the rest of the year. I'm expecting a really good year in 2021" for the Colorado Springs economy, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. "The only things limiting housing construction are availability of land and labor, so I expect the boom to continue. The availability of COVID-19 vaccine also has helped build consumer confidence."

Without big gains in miscellaneous retail, which includes online sales, and building materials, sales tax revenue would have declined from January 2020 Collections from miscellaneous retailers were up 66.4% from a year ago, while sales of building materials jumped 34.2% during the same period. Those increases easily offset declines in sales tax from restaurants, hotels and motels, among the hardest hit by the COVID-19 pandemic.

"This shows real growth in the (local) economy. It shows that despite everything that has happened in the past year the fundamentals are pretty good," Colorado Springs Mayor John Suthers said Friday. "I am hopeful that tourism also will be improved this summer. There is a lot of pent-up demand and once people get vaccinated that should lead to a really good summer season."

The city levies a 2% sales tax on consumer and business purchases of vehicles, appliances, business machines and many other items. The tax is a key economic indicator and funds more than half of the city's general fund that pays for public safety, roads and other services. The city also collects special sales taxes for road repair, public safety and trails, parks and open space that totaled $7.67 million in January.

Other highlights from the sales tax report include:

• Revenue from the city's tax on hotel rooms and rental cars in January was down 18.9% from a year ago to $307,281, the smallest percentage decline since the pandemic hit.

• Collections from the city's use tax, paid on equipment businesses buy outside the city, in January rose 8.9% from a year earlier to $659,015, the third consecutive monthly increase and fourth in the past five months.

• Two other retail categories with strong gains in January included medical marijuana dispensaries, up 40.5%, and furniture, appliances and electronics, up nearly 30%.

Contact Wayne Heilman 636-0234

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