Sales and use tax collections continue to lag

Phil Castle

Phil Castle

Phil Castle, The Business Times

In terms of local sales and use tax collections, 2016 likely will end up more like 2014 than 2015.

Collections for the City of Grand Junction and Mesa County continue to lag and, barring a surge over the next two months, will remain below year-end totals for 2015.

City and county officials don’t project substantial increases for sales tax collections in budgeting for 2017. But further decreases aren’t anticipated, either.

Jodi Romero, financial operations director for the City of Grand Junction, said she’s hopeful collections will level off. Eleanor Thomas, budget manager for Mesa County, also said she’s hopeful. “I’m hoping things will pick up.”

The city reported a 1.9 percent decline in combined sales and use tax collections in October compared to the same month last year. The decrease was proportionally larger for Mesa County at 7.4 percent. October collections reflect September sales.

City sales and use tax collections have declined on a year-over-year basis for eight straight months. Collections so far in 2016 lag 2.6 percent behind the same span in 2015, but still outpace 2014.

Mesa County sales and use tax collections have declined on a year-over-year basis for eight out of 10 months in 2016 to fall 4.8 percent behind 2015, but exceed 2014.

For October, the city reported collecting a total of almost $4.4 million. That’s $83,687 less than the same month last year. Sales tax collections fell 1.5 percent. Use tax collections, a smaller and more volatile revenue source based on sales in the energy and construction sectors, fell 23 percent.

Through October, the city collected a total of about $41.5 million in sales and use tax collections during 2016. That’s about $1 million less than the same span in 2015. Sales tax collections slipped 1 percent, while use tax collections fell 35.3 percent.

Romero said the declines reflect not only a cyclical downturn in the energy sector related to low oil and natural gas prices, but also what could be longer-term circumstances.

City sales tax collections for the third quarter reflected year-over-year decreases in motor vehicle sales as well as merchandise sold in appliance, clothing, electronics and sporting goods stores.

Collections increased, though, on sales of building materials and construction equipment as well as sales at bars, hotels, liquor stores and restaurants.

Analyzed by location, city sales tax collections decreased in downtown Grand Junction and along North Avenue and Horizon Drive. Collections increased, however, along U.S. Highway 6 & 50 and Patterson Road and edged up at Mesa Mall and along 24 Road.

Romero said city sales tax collections are projected to remain flat for 2017.

Mesa County reported collecting a total of about $2.6 million in sales and use taxes in October. That’s about $208,000 less than the same month last year. Sales tax collections fell 6.2 percent. County use taxes collected on automobiles and building materials purchased outside the county but used in the county fell 17.8 percent.

Collections fell on a year-over-year basis 7.2 percent on retail sales. Collections in other industries fell 5.7 percent, with a 61.1 percent drop in the oil and gas sector, 36.5 percent decline in the transportation sector and 22.9 percent decrease in the construction sector.

Through October, Mesa County has collected a total of more than $25.7 million in sales and use taxes during 2016. That’s about $1.3 million less than the same span in 2015. Sales tax collections fell 3.5 percent, while use tax collections retreated 16.4 percent.

Thomas said she projects county sales tax collections to increase slightly in 2017 — about a half of a percentage point.

Phil Castle is editor of the Grand Valley Business Times, a twice-monthly business journal published in Grand Junction. Castle brings to his duties nearly 30 years of experience in editorial management positions with Western Colorado newspapers. In addition, his free-lance work has appeared in a variety of publications, including the Washington Post. He holds a bachelor's degree in technical journalism from Colorado State University.
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Posted by on Nov 15 2016. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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