September shows abnormal sales tax growth

The Archuleta County treasurer has received $791,218.36 in sales tax revenue for September 2014, which is 27.89 percent higher than the same period last year, according to a report this week from Larry Walton, the county’s finance director.

The data in this report goes back to the beginning of 2004, and during this 10-year period, December of 2006 held the previous record for the most revenue collected in one month with $764,866. Until this year, it was the only month with collections more than $700,000. However, so far this year July, August and now September have all exceeded that mark.

“The State continues to disburse both the County and Town portion of the sales tax directly to the County,” Walton’s report stated. “Our understanding is that the State will remit the Town portion of future sales tax directly to the town, after they work thru the details of a system conversion still in progress on their end.”

All sales tax generated within the county, regardless of whether it comes from a business within town limits or not, is split evenly between the town and county. Traditionally, the county has received all of the sales tax revenue and then distributed half to the town, but when the county decided earlier this year to start charging the town for this service, the town asked to receive its portion directly from the state, instead. The gross amount of the town portion is $395,609.18.

While this month’s collections are significantly higher than the revenue received in September of 2013, Walton explained “The month-to-month comparison is not meaningful, as most of the increase is due to collection timing issues, being the receipt of two months of tax revenue, rather than one month, from one or more businesses during September.”

Grocery stores, for example, pay taxes every four weeks instead of every month, meaning they make 13 payments per year instead of 12. During one month each year these businesses make two tax payments, one at the beginning of the month and another right at the end, which throws off the over-the-year comparison.

“The more revealing statistic is year to date sales tax revenue,” Walton continued, “which has increased $478,769 (9.67%) during the first nine months of 2014, compared to the first nine months of 2013. January to September 2014 revenue was $5,427,721, versus $4,948,952 in 2013.”

The Pagosa Springs Town Council votes every January to extend the policy that protects and enhances its financial stability. According to this policy, if for two months in a row sales tax revenue drops by 5 percent when compared to the average for the previous two years during the same period, the town manager must take emergency action to reduce town spending.

However, so far this year, February has been the only month to experience any drop in revenue collections. All other months have shown growth.

Because of a recent communication from the Colorado Department of Revenue, which clarified certain reporting requirements it imposes, the portion of Walton’s report that breaks the total sales tax revenue down by sector has been modified. The amount of money generated by agriculture, forestry, fishing, hunting, transportation, warehousing, finance, insurance, educational services, health care, social assistance and public administration have all been combined and reclassified as “miscellaneous.”

Otherwise, revenue generated by retail trade — the largest portion of Archuleta County’s economy — went from $293,195 in 2013 to $411,909 in 2014, an increase of $118,714 or 40.5 percent.

The second largest portion of Archuleta County’s economy — accommodations and food service — generated $139,062 worth of revenue, an increase of $24,945 or 21.9 percent.

Town Tourism Committee director Jennie Green will report to town council today that lodgers’ tax revenue for September, which is collected above and beyond the regular sales tax, totaled $45,748, which is $3,133 or 7.4 percent higher than 2013. The last 10 months in a row have all set record highs for lodgers’ tax collection.

Arts, entertainment and recreation — another sector of the local economy largely controlled by the flow of tourism — brought in $6,899 worth of sales tax revenue, a slight increase compared to the $6,397 collected last year.

Utilities companies contributed $44,822, which is $2,923 or 7 percent more than last year, while real estate and rental revenue fell from $20,519 last year to $18,537 this year, a decline of $1,982 or 10 percent. The construction industry, however, rose to $18,038, an increase of $3,700 or 25.9 percent. Viewed together, these three sectors demonstrate an increase in the overall health of the housing market.

Wholesale trade rose by 8.9 percent to $29,394 and the mining industry garnered $18,955, an increase of $13,223 or 231 percent, while manufacturing went from $33,917 to $34,263 over the year.

 

This story was posted on November 20, 2014.