Glenwood Springs’ economy is ‘strong,’ as city reports sales tax collection exceeded 2021 forecast
Glenwood Springs’ economy rebounded beyond expectations in 2021, with local sales tax collection exceeding pre-pandemic levels, said Steve Boyd, Glenwood Springs chief operating officer.
“This is indicative of significant growth,” Boyd said. “A part of that is remote sellers paying into 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 was collected in 2019.
While some members of the business community speculate peak sales in 2021 could level off in the coming years, Boyd said he doesn’t view 2021 as an anomaly for sales tax.
“I think 2021 will set a sales tax base,” Boyd said.
The city is receiving more tax dollars from remote sellers, like Amazon.com, each year, contributing to the uptick in tax collections, he explained.
Following state legislation passed in 2018, Colorado began requiring out-of-state sellers to remit sales taxes to the 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 has received more sales tax from remote sellers each year, a trend he anticipates will continue.
Glenwood Springs reported sales tax collection was higher in 2021, with only 11 months of data consolidated so far, than in any year in the past five.
2021 (through November): $20.2 million
2020: $18.3 million
2019: $19.2 million
2018: $18.4 million
2017: $17.3 million
December 2021 is not included in the city’s most recent sales tax report, but in the past five years, December has remained the city’s highest performing sales tax month.
Since 2017, the city has typically collected about $1 million more in sales tax than the year prior, with 2020 being the exception where sales tax collection dipped nearly $1 million.
If sales tax collected in December follows the trend of the previous five years, Glenwood Springs could see an end-of-year total of about $4 million more than the tax collected in 2020 and $3 million more than 2019.
Month by month, the city’s year-to-date changes in sales tax collection compared to both 2019 and 2020 increased by double-digit percentages across the board, with June experiencing the largest increases.
The city collects 3.7% on sales and use transactions. Once collected, the money is siphoned into five accounts: 1.5% to the general fund, 1% to the acquisition and improvements fund, 0.5% to the capital projects fund, 0.5% to the streets tax fund and 0.2% to the bus tax fund, Boyd said.
City staff use sales tax collection data from the current year to forecast the next year’s earnings, which is used to determine the Glenwood Springs’ annual budget.
If sales tax collections perform better than anticipated, Boyd said staff can revise the forecast, allowing city council to decide whether to move forward on projects rolled over from the previous year or start future projects early.
If more tax revenue is collected than is spent, the remainder goes into the city’s reserve funds. On the flipside, if the city spends more through its budget than it collects through tax revenue, Glenwood Springs dips into its reserve fund, Boyd said.
“When sales tax continues to rise, that means prices are either going up or more items are selling,” he said. “That means people are making money and doing pretty well. Glenwood’s economy is strong.”
Reporter Ike Fredregill can be reached at 970-384-9154 or by email at firstname.lastname@example.org.