Phil Castle, The Business Times
Sales and use tax collections have increased in Mesa County for the first time in four months on more purchases of automobiles and home improvement supplies.
While the gain is encouraging, one month doesn’t constitute a trend, said Eleanor Thomas, county budget manager. “I think we need to wait and see.”
Sales and use tax collections continue to decline for the City of Grand Junction, although part of the drop reflects lower collections from the telecommunications industry.
Mesa County reported collecting a total of more than $2.25 million in sales and use taxes in March, an increase of $38,999 and 1.76 percent over what was collected during the same month last year. Sales tax collections rose 1.6 percent, while use tax collections increased 3.2 percent. The overall gain was the first for Mesa County since November, when collections rose 1.6 percent.
The City of Grand Junction reported collecting a total of more than $3.47 million in March, a decrease of $26,506 and almost eight-tenths of a percent compared to the same month last year. A seven-tenths of a percent decrease in sales tax collections more than offset a 16.2 percent increase in use tax collections.
March collections reflect February sales.
County tax collections rose on higher sales of automobiles and auto repair supplies as well as home improvement merchandise, Thomas said. Collections from the oil and natural gas sector also increased. Collections on retail sales declined 2 percent, though, with decreases in the sale of clothing, health and personal care items and sporting goods.
The city reported similar results with increased automobile and building material sales, but decreases in sales at department and warehouse stores as well as the sale of clothing, electronics, furniture and sporting goods, said Jodi Romero, financial operations director.
There was another drop in sales tax collections in the telecommunications industry from two businesses that reported higher sales a year ago, Romero said. Removing that difference from the overall numbers turns a seven-tenths of a percent drop into a 3.4 percent gain, she said.
For the first quarter of 2017, Mesa County reported collecting a total of nearly $7.3 million in sales and use taxes. That’s $120,755 and 1.63 percent less the first quarter of 2016. Sales tax collections declined 1.5 percent, while use tax collections fell 2.6 percent.
County tax collections on retail sales slipped 1.2 percent during the first quarter of 2017 compared to the same span in 2016. Sales tax collections increased from the automotive, home improvement and oil and natural gas industry sectors, but decreased from the construction, hotel and restaurant and manufacturing sectors. Like the city, the county reported a drop in collections from the telecommunications sector.
While county tax collections continue to come in at less than what’s budgeted, Thomas said she still expects sales tax collections to edge up a half percent in 2017 over what was collected in 2016.
The City of Grand Junction reported collecting a total of more than $12.2 million in sales and use taxes during the first quarter of 2017. That’s a decrease of $106,129 and almost nine-tenths of a percent compared to the first quarter of 2016. Sales tax collections slipped a half of a percent, while use tax collections rose 2 percent.
Romero said there are indications the Grand Valley economy is improving, but tax collections also could be changing as an indication of economic conditions and consumer confidence.
National trends reflect a transition from the purchase of products to more services, which aren’t taxed, Romero said. Morever, the millennial generation that now makes up the largest segment of the United States population tends to buy less, she said.
Those trends present long-term challenges to government entities that rely on what could be decreasing sales tax revenues to meet increasing demand for services, Romero said. “I think we need to start to consider that.”