Upward sales tax trend offers encouragement

Phil Castle, The Business Times

 Year-over-year increases in sales tax collections in the Grand Valley continue to offer encouragement retail activity has picked up and economic conditions are improving.

“Overall, it looks good,” said Jodi Romero, financial operations director for the City of Grand Junction.

Frank Whidden, deputy administrator for resource management at Mesa County, agreed. “We’re happy that it’s a least trending up.”

The city and county both reported year-over-year increases in sales tax collections in April. The gains were the sixth over the last seven months.

Still, neither the city nor county have budgeted for increased sales tax revenue for 2014, projecting conservatively that collections will hold steady.

The city reported collecting a total of nearly $4.26 million in sales and uses taxes in April, an increase of $69,000 and 1.6 percent over the same month last year. 

A 4.3 percent increase in sales tax collections more than offset a 36.3 percent decrease in use tax collections, a decline that reflects less activity in energy exploration and production in the region. 

For reports covering the first four months of 2014, the city collected a total of almost $16.2 million in sales and use taxes, an increase of $162,000 and 1 percent over the same span in 2013.

Since tax reports lag a month behind, April reports reflect March sales. Reports for January through April reflect sales from December through March.

According to a separate report for the first quarter of 2014, gross retail activity in Grand Junction was up 5.7 percent over the first quarter of 2013. That measure includes sales subject to tax as well as those that are not, such as those for food.

The biggest year-over-year gains by category included a 19.1 percent increase in business-to-business transactions, a 10.7 percent increase in motor vehicles and a 9.7 percent increase in building materials and construction equipment.

Romero said she was concerned, though, by a 5.8 percent decrease in miscellaneous retail sales and a 3.3 percent decline in general merchandise sales — the largest and third largest categories, respectively, for sales tax revenues. She suspects those declines could be attributed to a declining population in the city.

Mesa County reported collecting a total of nearly $2.3 million in sales taxes for its capital improvement and general funds in April, an increase of $58,000 and 2.63 percent over the same month last year.

For reports covering the first four months of 2014, the county collected a total of more than $8.7 million  in sales taxes for its capital improvement and general funds. That’s an increase of $105,000 and 1.2 percent over the same span last year. 

Whidden said it’s difficult to attribute the increase to any one factor. “I don’t have any single smoking gun to identify.”

But there’s a sense economic conditions are improving, he added. “We feel that things are looking a little better than they did.”

Still, Mesa County won’t adjust its budget for 2014 to reflect increasing sales tax collections unless the trend continues for a bit longer, Whidden said. “We’re definitely being cautious.”

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 May 15 2014. 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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