City sales tax collections reflect increasing retail activity

Phil Castle, The Business Times

Sales tax collections in Grand Junction continue to outpace last year, a promising trend not only for city coffers, but also retail activity.

“It’s definitely encouraging. I hope it holds,” said Jodi Romero, financial operations director for the city.

The city collected a total of almost $3.6 million in sales and use taxes, according to its March report. That constitutes a 7.3 percent increase over the report for March 2011.

Since tax reports lag a month behind, March numbers reflect February sales.

The March 2012 report includes nearly $3 million in city sales tax collections and almost $445,000 in sales taxes collected by Mesa County and distributed back to the city. Grand Junction collected just over $174,000 in use taxes.

While sales tax collections exceed last year, use tax collections lag behind. Use tax collections reported in March came in at nearly 30 percent below the same month last year.

Romero said the decline reflects in large part less activity and investments by the companies that provide support services to the energy industry in the region.

Grand Junction imposes use taxes on goods purchased from suppliers outside the city, but used inside the city, including equipment and materials.

However, growth in sales tax collections on a year-over-year basis have so far more than offset declines in use tax collections, Romero said.

For tax reports through the first quarter of 2012, the city collected a total of almost $12.5 million, up nearly 4.3 percent from the same span last year. Reports for the first quarter reflect sales that occurred between December and February.

Combined with the latest tax report from Mesa County — which reflects a 9.8 percent increase in collections in March and a 10.1 percent increase in collections for the first quarter compared to last year — the statistics constitute a good sign of economic recovery, Romero said.

The City of Grand Junction has experienced year-over-year growth in sales and use tax revenues since mid-2010. That followed what was in 2009 and the first half of 2010 the worst drop in tax revenues in 25 years, Romero said.

Despite the recent gains, the city continues to budget conservatively in projecting flat revenues for 2012, she said.