Report: Aspen retail economy flattening but still ahead of 2021
The city saw a 30% increase in sales-tax collections for the first seven months of this year compared to the same period 2021, but July alone showed signs that Aspen’s retail economy is flattening.
The city reaped $17.4 million in revenue from its 2.4% sales tax through July, according to the Finance Department’s monthly tax consumption report issued on Tuesday. The city also collected an additional $3.6 million through this year’s first seven months from the 2% bed tax charged to overnight guests, the report said.
Yet, while Finance Director Pete Strecker said year-to-date sales and collections are well ahead of the same time frame in 2021, there’s more to read behind the numbers.
Taxable sales totals of $124.9 million in July were 0.1% ahead of July 2021, which Strecker said “had unprecedented economic activity, skewing this month‐to‐month comparison.”
Inflation, however, also played a part in July sales activity, he continued, an observation he also made in the city’s June tax-consumption report.
“That said, given that price escalation remains well above Federal Reserve targets and has influenced the cost of goods and services not just nationally but also within our own community, it is reasonable to conclude that there is softness in the aggregate volume of taxable sales,” Strecker said about July.
The overall inflation rate in the United States was 8.5% in July, while the 10.9% increase in food prices from July 2021 to July 2022 was the largest 12-month increase during that period since May 1979, according to the Bureau of Labor Statistics.
The city of Aspen this week released its sales tax consumption report for July. Below are year-to-date sales totals broken down by industry.
Category Retail Sales % of Total Retail Sales % Change to 2021
Accommodations $221,630,309 30.7% 73.4%
Restaurants/Bars $121,226,848 16.8% 42.2%
Sports Equip/Clothing $44,949,615 6.2% 18.9%
Fashion Clothing $85,361,654 11.8% 33.7%
Construction $46,882,063 6.5% (9.0%)
Food & Drug $46,806,990 6.5% 14.7%
Liquor $7,873,899 1.1% (1.2%)
Miscellaneous $55,873,773 7.8% 19.3%
Jewelry/Gallery $27,370,273 3.8% 20.1%
Utilities $30,510,384 4.2% (2.2%)
Automobile $20,603,864 2.9% 10.0%
Cannabis $5,885,937 0.8% (15.8%)
Bank / Finance $3,056,859 0.4% 19.5%
Health / Beauty $2,765,509 0.4% (26.9%)
Total $720,797,979 100.0% 31.6%
Source: City of Aspen Finance Department
Year-to-date sales through July totaled $720.8 million, 31.6% ahead of the seven-month total last year, which limped off the gate with public-health orders that steered away visitors.
RETT slows in August
The city bills property buyers for 1.5% real-estate transfer tax at the closing of a sale. One-third of the RETT revenue goes toward the Wheeler Opera House fund, and the other two-thirds are set aside for worker housing.
The city’s report looked at RETT revenue in August, which saw collections were 29% lower that the amount produced in August 2021. The most recent August generated $1.36 million in RETT for the city’s worker-housing program and $704,878 for the Wheeler.
RETT collections for January through August this year, however, are 17% ahead of the first eight months of 2021, the report said. The RETT brought in $13 million during that period for city housing and $6.7 million for the Wheeler Opera House, the report said.
There haven’t been as many property deals this year, Strecker noted, but the high transaction amounts have made up the difference.
“The number of transactions in 2022 remains roughly 25% below the volume of sales in 2021, yet the cash consideration per transaction is averaging roughly 56% above that of the previous year,” Strecker wrote in the report.
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