Tax numbers reflect stronger holiday sales

Phil Castle
Phil Castle

Phil Castle, The Business Times

If  tax collections are any indicator — and they usually are — Grand Valley businesses enjoyed slightly higher holiday sales this year.

The City of Grand Junction and Mesa County both reported year-over-year gains in January sales tax collections based on December sales.

The numbers are doubly important not only in quantifying holiday sales, but also because the single largest month of the year for sales tax collections usually occurs in the first month of the year.

“We’re off to a good start,” said Jodi Romero, financial operations director for the city. Moreover, long-term trends in sales and sale tax collections continue upward, Romero said. “We’re moving in the right direction.”

Mesa County Administrator Frank Whidden agreed. “We hope this is the return of consumer confidence and people buying locally.”

The city reported collecting a total of more than $5.1 million in sales and use taxes in January, a 1.6 percent increase over same month in 2014. A 2.2 percent gain in sales tax collections more than offset a 9.7 percent drop in the more volatile use tax collections.

Romero said the sales tax numbers reflect in part improving consumer confidence in the economy. If there’s any substantial leakage related to Internet sales, it didn’t appear to worsen, she added.

The county reported collecting a total of more than $3.1 million in sales and use taxes in January. With a 9.7 percent increase in sales tax collections and 26.1 percent increase in use tax collections, overall collections were up 11 percent over the same month in 2014.

“We’re just ecstatic,” Whidden said, also attributing the gain in part to stronger holiday sales. “It certainly looks like it went very well.”

Whidden said from what he observed personally, stores and restaurants were busy. “From the pieces I was able to see, it looked really good.”

The latest numbers extend what’s been an upward trend in sales tax collections over the past five years.

For the City of Grand Junction, sales tax collections totaled $41.4 million in 2014, the highest level since 2008. The city has budgeted a 3 percent increase in sales tax revenues for 2015.

For Mesa County, sales and use tax collections climbed to a total of $30.6 million in 2014, up 2.6 percent over 2013. Combined sales and use tax collections for the county have increased in each of the last five years. The county has budgeted a 2 percent gain in sales tax collections for 2015.

The county earmarks 1 percent of the 2 percent sales tax it assesses for a capital fund. That means increased sales tax collections provide additional funding for road projects and other improvements, Whidden said.

Even with the latest gains, it could be a while before sales tax collections return to pre-recession levels, Romero said. While the local population has grown, the labor force remains about 10 percent below peak employment levels before the recession, she noted.