2020 tax revenues increase in spite OVID restrictions

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By Marissa Lorenz

In spite of anticipated losses after the COVID19-related closures and labor impacts that began in March of last year, local spending appears to have increased in 2020. Both Town and County sales tax receipts show an increase in collections made by retailers between January and December, 2020, as compared to those in 2019.

The Town of Kremmling is reporting an annual increase of 23% in sales tax revenues for 2020, compared to 2019. And Grand County is reporting an averaged 5% increase in general sales tax collections for 2020 in spite of a couple of low-receipt months.

Sales tax revenue is an important income source for the County, but is critical to town operations and infrastructure, generally providing over 75% of a municipality’s annual income. When the coronavirus pandemic started to cause business closures and restrictions to travel, officials began to express concern.

Town and County officials worked diligently in April and May to modify budgets, initially factoring a 50% negative impact from sales tax losses.

But in May, when the Town of Kremmling’s March sales tax receipts were reported, reflecting consumer behaviors during the first economic restrictions, the concern appeared unwarranted.

Kremmling sales tax revenues soar in 2020

The Town of Kremmling saw a 20% increase in sales tax revenue collected for March 2020, collecting $82,298 compared to only $68,812 in 2019. And that trend continued throughout the year, with May being the only month with a less than 15% increase in sales over the year before.

In April, a month during which the State of Colorado had been ordered to a near total shutdown, Kremmling retailers/sellers collected 23% more in sales taxes than in the same month of 2019. In May that number dropped to 5.5%, but still increased from
$92,562 in 2019 to $97,690 in 2020.

Collections over the summer months increased 26.5% for June, a whopping 40% for July–when sales tax collections were up $38,141, from $94,354 in 2019 to $132,496 in 2020–and 24% in August.

September and October sales tax collections rose 24% and 18%, respectively. And November collections increased 15%, even amid a second round of COVID-19-related restrictions put in place by Grand County just prior to Thanksgiving.

An unprecedented 46% increase in sales tax collections was reported for December, with $122,548 in 2020, compared to $83,745 in 2019.

For the year, Kremmling retailers collected $1,302,306 in sales tax for 2020, $246,006 more than in 2019.

County sales tax collections up 5%

The County saw some different numbers following COVID-19 impacts in Colorado.

In May, when they received their March sales tax collections–again, the first measured economic indicators for the County following COVID-19 restrictions–they saw a 23% reduction in general sales tax receipts, collecting only $411,378 in 2020, compared with $533,229 in 2019.

Sales tax receipts from April remained nearly flat, hovering around $330,000, reflecting a month in which businesses were closed and travel was restricted across much of the country, an important factor for much of Grand County which normally benefits from high Spring Break visitation at this time.

Numbers from May increased 10% over 2019, from $321,596 to $355,029, and the summer months started slow with only 5% and
4% increases for June and July respectively. However, a long summer showed significant increases in August and September when collections were up 19% and 16%.

October’s anticipated slow mud season brought only a 5% increase in general sales tax collections over the previous year. And when Grand County enforced another strict shut-down just prior to Thanksgiving, it seemed to impact sales just as did the early shut-down.
Although another factor during this period was the East Troublesome Fire, which forced the evacuation and displacement of thousands of residents in north and east Grand County in late October and the influx of a large number of emergency personnel through November.

November–a month whose sales tax collections had increased each of the previous four years, with an unparalleled 57% jump in 2019–showed a 9% decrease in general sales tax collected in 2020, dropping to $427,787 in comparison to $466,912 in 2019. December showed only a moderate increase of 6%, with collections of $665,692 compared to $626,551 the year before.

In total, rather than seeing the feared decrease in sales tax revenue, Grand County retailers collected $6,276,091 in general County sales tax in 2020, compared to $5,965,519 in 2019–a positive difference of $310,572. County sales tax collections in 2018 only totaled $4,718,086, meaning that the County still realized a 33% increase in 2020 when compared to just two years previously.

The County also recorded increases in collections from both the voter-approved Open Lands, Rivers, and Trails (OLRT) sales tax and lodging tax in 2020. The OLRT sales tax collections increased 7%, from $1,710,308 in 2019 to $1,819,016 in 2020. Lodging tax collections were up 6% over the year before.

It should be noted that while taxes are collected at the time and point of sale, they are remitted to the state and not returned to local government budgets until two months later.