Aspen marketing tax revenue falls short in early going |

Aspen marketing tax revenue falls short in early going

Janet Urquhart
The Aspen Times
Aspen CO Colorado
City of AspenThis chart shows the amount each sector of Aspen's retail economy contributed to the whole of retail sales in January.

ASPEN – Revenues from Aspen’s new, additional 1 percent lodging tax devoted to marketing came up about $20,000 short of projections in January – the first month of its collection, according to the latest sales tax report from the city’s finance office.

Voters approved the 1 percent tax last November; it was added to an already existing .5 percent tax devoted to tourism promotion. The combined 1.5 percent sales tax is applied only to lodging bills rather than all retail sales.

The 1.5 percent tax produced $250,592 in January revenues, a sum that’s down about $20,000 from the $270,480 that was budgeted for the month. January was expected to produce the single largest infusion of marketing funds of any month, according to projections.

“It was not quite as robust as we’d hoped,” said Jim Harmon, city controller.

Over the course of the year, the “bed tax” is expected to generate $1.47 million for resort marketing. The Aspen Chamber Resort Association has budgeted the spending of the money with a focus on marketing Aspen in the spring, summer and fall; the Aspen Skiing Co. takes the lead in promoting the resort during the winter months.

With the increased tax, revenues for marketing were up 190 percent in January compared to the same month in 2010, when just .5 percent was collected.

Without the added tax approved by voters, collections would be down. The city’s .5 lodging tax devoted to transportation produced $83,531 in revenues in January – down 3 percent from the same month a year ago.

While marketing tax revenues were off what was budgeted by 7 percent, ACRA officials aren’t panicking. At the end of June, the year’s half-way point, chamber officials will take a close look at how much the marketing tax is generating and adjust accordingly, said ACRA President Debbie Braun.

“If money’s not coming in, we have ways to not overspend,” she said.

The chamber keeps about $20,000 in reserve within its destination marketing fund and, in addition, has budgeted allocations that it can opt to not spend if need be, Braun added. In its contract with the city, the chamber can draw more money than the tax produces in some months, and take less money than the tax generates in other months. After the end of the year, any under- or overpayment must be reconciled, she said.

The revenue projections for the marketing tax call for collections of $220,500 in the month of February and $235,200 in March, before revenues drop off substantially during the offseason months.

Collections from the city’s 2.1 percent sales tax on all retail sales were down 1 percent compared to January 2010, but actual retail sales were flat, according to the finance office report.

The report indicates receipts for tourist accommodations were up 6 percent in January, compared to the same month a year ago, but the figure is misleading. It also reflects revenues from restaurants and bars within hotels that contain such establishments, Harmon explained.

Other restaurant/bar business in Aspen was up 4 percent for the month.

Sports equipment sales were up 6 percent for the month, while general retail receipts were up 8 percent. Among other large categories, however, clothing sales, food and drug receipts, and utilities were all down. The specialty retail category was flat.

Overall retail sales in January totaled $57.2 million, matching receipts in January 2010, according to the report.

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