Cash for Clunkers boosts city's September sales tax collections

Thanks to a boost from the federal Cash for Clunkers program, September sales tax collections in Colorado Springs fell 4.37 percent from the year before  — the smallest decline in 13 months.

BREAKING DOWN THE NUMBERS:

September sales tax collections, reported today by the city’s Revenue and Collections Division, reflect economic activity in August. Cash for Clunkers, which ended Aug. 24, boosted car sales across the country by offering rebates to consumers who traded in their old gas guzzlers for more fuel-efficent vehicles. Auto dealers were the only category to show a gain in the September report, with collections up 15.31 percent from September 2008.

Categories showing the greatest decreases were hotel/motel, down 18.28 percent; building materials, 17.34 percent; and auto repairs and leases, 16 percent. Collections from clothing stores and department/discount stores were essentially flat — down 0.33 percent and 0.47 percent respectively.

USE TAX: Use tax, a more volatile component of the city’s tax revenue, was down 49.31 percent in September.

Use tax is collected on manufacturing equipment, building materials and other items bought outside the city.

WHY IT’S IMPORTANT: Sales and use tax revenue fund municipal operations such as police, fire and street repair. With sales tax collections down, voters will decide in November on Issue 2C, a property tax increase.
Sales tax revenue so far this year is off 8.31 percent from a year ago.