Colorado Springs sales tax rise for fifth consecutive month

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Consumer spending in Colorado Springs continued in April at the moderate pace it has maintained throughout 2018, the latest sales tax numbers from the city show.

Sales tax collections for May, based on transactions in April, rose 4.2 percent from May 2017 to $12.8 million. Collections have increased between 4 percent and 6 percent every month this year and are up 5 percent from a year ago to $50.6 million in 2018.

Sales of furniture, appliances and electronics were up nearly 40 percent in May to about $800,000 and provided more than half of the overall gain.

Business services and commercial machines also were up by double-digit percentages, while the only declines were in medical marijuana, department and discount stores and the broad category of “all other.”

“Homebuilding is really strong right now, and when people move into new homes they upgrade their furniture, appliances and electronics,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.

“As long as the income gains continue, so will the spending.”

The 2 percent sales tax bankrolls more than half of the city budget for public safety, parks and other basic services, and economists consider the collections a key barometer of the local economy.

Other highlights from the sales tax report:

  • Revenue from the city’s tax on hotel rooms and rental cars in May recovered from April’s decline, the first in more than three years, by increasing 8.6 percent to $534,605. This year, collections are up 4.1 percent from a year ago.
  • Collections from the city’s use tax — paid on equipment and machinery bought outside the Springs — fell 17.9 percent to $632,994, the lowest total and biggest decline since September. This year, use tax collections remain up 8.4 percent.
  • Overall sales and use tax revenue in May was up 2.9 percent from May 2017 to $13.4 million and is up 5.2 percent this year to $53.8 million.
  • Revenue from the city’s road repair sales tax in May was up 3 percent to $4.17 million and this year is up 5.3 percent from a year earlier to $16.7 million.
  • Collections from special sales taxes for public safety and trails, open space and parks in May increased 2.9 percent from a year ago to $3.36 million and are up 5.2 percent this year, to $13.4 million.