Amazon Sortation Center-Colorado Springs (copy)

Amazon opened a sorting center Sept. 8 in the Colorado Springs Airport’s Peak Innovation Park. Online sales from Amazon and other online retailers helped push Colorado Springs sales tax revenue in August 24.4% above August 2020.

Worries about a growing number of COVID-19 cases did little to slow Colorado Springs sales tax revenue growth in August, according to a report from the city's Finance Department.

Collections from the city's 2% tax on cars, appliances, TVs, clothing, building materials and other retail purchases fell about $2.5 million last month from July's record total but still jumped 24.4% from August 2020. The revenue total reflects purchases in July, when the seven-day average of COVID-19 case numbers per 100,000 residents in El Paso County more than doubled but well before case numbers peaked in early September.

Colorado Springs sales tax collections spike to record high

Nearly all of the increase from a year ago was generated by three categories — miscellaneous retail, which includes online sales, lodging and building materials. Revenue from hotels and motels more than doubled from a year ago to $1.46 million, while revenue from miscellaneous retailers was up 53.4% during the same period to $2.54 million and tax paid on building materials increased 22.1% to $2.96 million.

Tatiana Bailey, director of the University of the Colorado at Colorado Springs Economic Forum, said the local gains came despite a nationwide slowdown in travel triggered by the spread of the Delta variant of coronavirus. Tourism in the Colorado Springs area has remained strong since early spring.

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"This reflects tourism that is off the charts locally and the local economy's recovery of nearly all of the jobs lost during the pandemic, which puts Colorado Springs well ahead of many other regions," Bailey said.

The $123 million collected in sales taxes so far in 2021 is up nearly 30%, or nearly $30 million, from the same period last year. Monthly sales tax collections have increased by double-digit percentages every month since March and have been at least $2 million a month higher than totals for the same month in 2019, before the pandemic triggered a statewide stay-at-home order and other restrictions on local businesses.

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Colorado Springs Mayor John Suthers said overall sales tax revenue could end the year between $30 million and $40 million above budgetary limits set by the state constitution and city charter. The city is asking voters in November to let it keep $20 million beyond the revenue limit to set up a wildland fire mitigation fund. If voters approve the ballot question, Suthers estimates the city would still refund the between $10 million and $20 million to taxpayers on utility bills.

"August was a great month and it shows unbelievable levels of economic activity," Suthers said. "I don't know if it will continue, but what I do know is that restaurants in Colorado Springs are still crowded and I see Amazon trucks everywhere in the city delivering online purchases, so people are still still spending."

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Although the overall sales tax total fell from July to August, revenue from a separate tax on auto rentals and hotel rooms surged to another record — $1.28 million from the previous $1.1 million record set in July. The August total was more than double the revenue the tax generated in August 2020 and was up nearly 29% from the August 2019 total, which had been the monthly record before July.

Other highlights from the August sales tax report include:

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• Every retail category tracked by the city increased from the same month a year earlier except for medical marijuana, which declined 31.5% to $188,008, and auto repair and leases, which fell 5.8% to $872,571. Revenue from business services, the smallest category, more than doubled to $181,216.

• Revenue from the city's use tax, collected on business equipment and machinery purchased outside the city, fell 7.3% to $993,377, though the August 2020 total was the second-highest monthly total last year. Use tax revenue so far this year is up 13.9% from the same period last year to $5.66 million.

• Overall sales and use tax revenue in August increased 22.4% to $20.7 million and so far this year is up 29.1% to $128.7 million. The city also collects special taxes for road repair, public safety and trails, parks and open space that combined totaled $10.8 million in August and $62.9 million so far this year.

Contact Wayne Heilman 636-0234



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