Back-to-school shopping boosts sales tax collections

Phil Castle, The Business Times

Bolstered in part by earlier than usual back-to-school shopping, sales tax collections have surged in the Grand Valley.

Mesa County reported an 8.2 percent increase in year-over-year sales and use tax collections in its August report. The City of Grand Junction reported a 7.2 percent increase.

With gains in 10 out of the past 11 months, the upward trend in sales tax collections constitutes an indicator of higher retail sales and improving economic conditions.

“The trend is continuing in the right direction,” said Frank Whidden, deputy Mesa County administrator for resource manager.

Jodi Romero, financial operations director for the City of Grand Junction, agreed. “I think, overall, it’s a positive sign.”

Mesa County reported collecting a total of more than $2.7 million in sales and use taxes in August, an increase of more than $206,000 and 8.2 percent over the same month last year. Sales tax collections were up 7.3 percent, while use tax collections increased 16.7 percent.

Because tax reports lag a month behind, the August report reflects July sales.

Whidden attributed the increase in sales tax collections in part to back-to-school shopping, much of which occurred in July because the local school year started in early August.

The latest numbers also include, however, a payment of penalties and interest on back taxes, he said.

The city reported collecting a total of more than $4,17 million in sales and use taxes in its August report. That’s an increase of more than $280,000 and 7.2 percent over the same month last year. Sales tax collections were up 7.5 percent, while use tax collections rose 21.7 percent.

Romero said the numbers reflect the effects of back-to-school shopping, but also increased vehicle sales.

The latest numbers bring year-to-date sales and use tax collections for Mesa County to a total of more than $20.2 million. That’s an increase of more than $426,000 and 2.2 percent over the same span last year. Sales tax collections are running 2 percent ahead of last year, while use tax collections are up 3.3 percent.

There’s a chance the back-to-school shopping that bolstered numbers in the August report could result in weaker numbers in the September report, Whidden said. But he remains mostly upbeat about collections for the remainder of the year.

Still, projections for the 2015 county budget remain conservative, he added.

The city has collected a total of more than $32.6 million in sales and use taxes so far in 2014. That’s an increase of nearly $645,000 and 2 percent over the same span in 2013.

A 3 percent increase in sales tax collections that amounts to more than $809,000 has more than offset a 16.2 percent decrease in use tax collections that amounts to nearly $234,000.