Bridge completion, new Amazon sales taxes impacting Glenwood Springs’ economy for the better
Businesses, particularly in Glenwood Springs’ downtown hub, have proven their resiliency after enduring a grand setback last year resulting from the largest infrastructure project on the Western Slope in 25 years — the Grand Avenue Bridge.
Add to that the new practice by some online retailers to voluntarily remit sales taxes to the city, and Glenwood Springs’ retail economy is looking pretty strong entering 2019, according to the city’s chief finance official.
In 2017, between mid-August and through early November, the so called “Gateway to Glenwood,” to no one’s surprise, took a drastic financial toll on the city from Seventh Street’s restaurant row to mom-and-pop retail shops, lodging and more.
“The increase in October over 2017 numbers is the result primarily of four categories,” Glenwood Springs Chief Operating Officer Steve Boyd said of a 15 percent year-over-year increase for the month.
According to Boyd, those categories included apparel, bars and restaurants, hotels and motels, and miscellaneous retail, the catch-all category that includes several of the downtown businesses.
“You can probably attribute a little more than half of the growth from last year directly to the bridge closure in October,” Boyd said.
To his point, the numbers don’t lie.
In October of 2016, when the old Grand Avenue Bridge still stood, the four categories Boyd mentioned generated a little over $500,000 in sales tax revenue for the city. Fast-forward a year to October 2017 – when the bridge was down and daily traffic backups through the detour route were the norm – and the same four categories produced roughly $50,000 less.
While such a decline, in the grand scheme of things, may not seem like a lot, combining all of the city’s 15 sales tax categories for October of 2016 and putting them alongside those from October of 2017 does. Sales taxes fell to the tune of $130,000 over the course of that one month, comparatively.
As evidenced by October 2018 sales tax receipts, though, the city’s economic thermostat has not only rebounded but continues to heat up, as every one of Glenwood’s sales tax categories were up, big time.
“Pretty strong across the board,” Boyd said of Glenwood’s most up-to-date economic data. “Bar and restaurant and hotel and motel categories being strong is a good sign for our tourism economy. The main retail areas all being up is a good indication of strong local spending as well.”
Long story short, in October 2018, Glenwood shoveled in over $1.4 million worth of sales tax revenue, marking a 15 percent increase compared to that from October of 2017. Sales taxes for the month represented roughly $39 million in retail sales, based on the city’s sales tax rate of 3.7 percent.
“Overall, a well-balanced, healthy retail month for Glenwood,” Boyd said.
Boyd also shed light on the online retail market, and the relatively new practice of collection and remittance of sales tax dollars to Glenwood from online sales.
According to Boyd, several online retailers, including Amazon, have already applied for and hold sales tax licenses in Glenwood on a voluntary basis.
Boyd explained how the online sales tax system presents numerous challenges in Colorado, because every municipality has its own tax codes, exemptions, and rates.
“That means an out-of-town retailer has to carry a license in every one of these, interpret from the local tax code whether or not to collect sales tax on a particular transaction, and then remit it either to the state or directly to one of the 71 home-rule cities that collect their own sales tax like Glenwood Springs does,” Boyd said.
“That’s a significant administrative burden to have to bear, and we’re doing what we can to make it easier, particularly for smaller retailers that do not have sophisticated reporting systems in place.”
Boyd said the city did expect to see a continued increase in tax revenue from these types of businesses heading into the new year.
Year to date for the city, sales tax receipts are running 5.8 percent ahead of last year. Through October, Glenwood Springs had collected just over $14.9 million on about $403.3 million in overall retail sales.
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