Aspen taxable sales dip in March compared to ’22
Aggregate taxable sales were down 2% in March when benchmarking against March 2022, the city of Aspen reported this week.
“Despite this slightly muted activity, this month’s activity continued the winter season trend of robust local economic activity, with 85% of spend taking place within local brick and mortar sales versus just 15% from online/external businesses, underlining strong performance for the local economy,” Finance Director Pete Strecker said in his monthly accounting.
Generally speaking, March is typically 11.5% of annual taxable sales, putting it in the top third of months for annual economic activity.
Diving into the industry level data, the high-dollar sectors — accommodations (down 1.2%) and restaurants/bars (up 3.1%) — posted very strong sales but are being compared to a record setting period of March 2022, he said.
Other notable sectors seeing growth are automobile (up 30%), miscellaneous (up 12%), and food & drug (up 6%). The more unpredictable and luxury sectors of fashion clothing (down 19.6%) and jewelry/gallery (down 36.6%) saw large declines but still posted sales nearly double the historical average.
Sales and Lodging Tax
March sales and lodging tax collections paced 2.4% and 2.1% behind March 2022, respectively. While this may seem soft, it is important to note March 2022 and 2023 both saw approximately $3.5 million in sales-tax revenue, while the proceeding five March periods averaged around $2 million, Strecker said.
Further highlighting the overall growth/strength in sales tax collections when looking at the winter season of December 2022 to March 2023, tax revenue collected in this four-month period ($14 million) is greater than the entirety of 2014 sales tax collections ($13 million) roughly one decade ago.
Year-to-date sales tax revenues are up over 6% compared to an exceptional 2022.
“However, we may be starting to see the start to an overall softening of the economy and local sales-tax collections with high interest rate environments stifling economic activity in attempts to improve the labor market conditions and curb inflation,” Strecker said.
March’s breakdown of the local lodging base reflects roughly two-thirds of taxable sales generated by traditional lodge offerings and one-third from short-term rentals (condo-hotels, investment properties, and owner-occupied but rented units). These percentages and overall taxable sales are closely aligned with January’s and February’s experience.
City Share of County Sales Tax
The city of Aspen’s allocated portion of Pitkin County’s 2.0% sales tax continues to be strong, with February collections up 13% to February 2022 and overall collections up 18% year to date.
These funds remain one of the only sources of discretionary receipts for the City Council to apply and are deposited within the city’s General Fund.
Real Estate Transfer Taxes
After four months, aggregate volume in real estate activity is lagging last year’s experience by 20%.
However, April reversed the trend of the previous two months and posted an increase in average value per transaction, with April 2023 including 6 transactions over $10 million vs. 2 in April 2022, highlighting the volatility in this revenue stream.
Overall tax receipts are still pacing roughly 31% below last year’s collections and are not expected to match those of 2022, he said.
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