Glenwood Springs economy ‘strong’ as city reports sales tax collection exceeded 2021 forecast
Glenwood Springs’ economy rebounded beyond expectations in 2021, with local sales tax collection surpassing pre-pandemic levels, Glenwood Springs chief operating officer Steve Boyd said.
“This indicates significant growth,” Boyd said. “Part of that is due to distance sellers paying local sales tax.”
Through November, the city collected about $20.2 million in sales tax, about $2 million more than Glenwood Springs collected throughout 2020 and about $1 million more than in 2019 .
While some in the business community believe the peak in sales in 2021 may flatten out in coming years, Boyd said he doesn’t view 2021 as an anomaly for sales tax.
“I think 2021 will establish a sales tax base,” Boyd said.
The city receives more tax dollars each year from distance sellers, like Amazon.com, which helps increase tax revenue, he said.
Following state legislation passed in 2018, Colorado began requiring out-of-state sellers to remit sales taxes to state and local governments. A grace period, which ended in 2019, gave sellers time to update their payment collection systems and familiarize themselves with the collection process.
Boyd said the city receives more sales tax from distance sellers each year, a trend he says will continue.
December 2021 is not included in the city’s latest sales tax report, but for the past five years, December has remained the city’s best-performing sales tax month.
Since 2017, the city has generally collected about $1 million more in sales tax than the previous year, with 2020 being the exception where sales tax collection dropped by nearly $1 million.
If sales tax collected in December follows the trend of the previous five years, Glenwood Springs could see a year-end total of about $4 million more than tax collected in 2020 and $3 million more than in 2019.
Month-to-month, year-to-date changes in the city’s sales tax collection from 2019 and 2020 grew by double-digit percentages across the board, with June seeing the largest increases.
The city collects 3.7% on sale and use transactions. Once collected, the money is siphoned into five accounts: 1.5% to the general fund, 1% to the acquisitions and improvements fund, 0.5% to the capital projects fund, 0.5% to the road tax fund and 0.2% to the bus tax fund. , says Boyd.
City staff use the current year’s sales tax collection data to forecast next year’s revenue, which is used to determine Glenwood Springs’ annual budget.
If sales tax collections perform better than expected, Boyd said staff can revise the forecast, allowing the city council to decide whether to move forward on projects carried over from the previous year or begin. future projects sooner.
If more tax revenue is collected than spent, the rest goes into the city’s reserve fund. On the other hand, if the city spends more through its budget than it raises through tax revenue, Glenwood Springs is tapping into its reserve fund, Boyd said.
“When sales tax keeps going up, that means prices are going up or more items are selling,” he said. “That means people are making money and doing pretty well. Glenwood’s economy is strong.
Journalist Ike Fredregill can be reached at 970-384-9154 or by email at [email protected].