Sioux Falls sales tax revenue drops in November, flat for the year
Dec. 18, 2020
Sales tax collected in Sioux Falls in the past year is barely ahead of a year ago after a drop in revenue received in November.
November sales tax, which represents what was collected in October, fell 1.5 percent compared with a year ago.
For the most recent 12-month period, that puts sales tax revenue for the city at 0.2 percent above the same time last year.
“We saw pretty strong growth in the later months of last year. Trying to go above the growth that we had last year is challenging,” said Shawn Pritchett, the city’s director of finance.
“With the impact that we saw, the surge occurring here in the fall related to COVID and some of the impacts that had locally, it’s not surprising to see some reduction in our sales tax activity as a result of that.”
Eating establishments were down 10 percent, or $3.6 million, for the month after being the previous month’s year-over-year comparison was about flat.
Electric, gas and sanitary services were down 13 percent, or $2.9 million.
Categories showing an increase included manufacturing, up 15 percent, or $3.1 million, and department and general merchandise stores, up 9 percent, or $5.8 million. Grocery stores were up 4 percent, or $1.7 million.
Remote retailer sales continued their climb for the year, up 31 percent or $6.2 million, compared with a year ago. (Note: This was corrected by the city after this story was originally published).
Revenue from the entertainment tax dropped 14.3 percent in November, for an 11.4 percent drop on average over the past 12 months. The lodging tax was down 26.1 percent year over year.
The city is projecting another year-over-year drop in what it receives in sales and entertainment tax revenue in the coming month.
“I would expect that we’ll probably see at least that (November’s drop) or a little bit more in the month of December as a result of what our November transactions were and hopefully some improvement from there as we go into December and the early parts of next year that we see some rebounding occurring in that regard,” Pritchett said.
