First half of 2022 shows increase in sales tax revenue, but a slowing summer for business in Summit County |

First half of 2022 shows increase in sales tax revenue, but a slowing summer for business in Summit County

Main Street Breckenridge is seen busy with shoppers, visitors and residents during Labor Day weekend 2021. Now that sales tax reports for the summer have come out, towns have begun to see the effects of inflation, short-term rental lodging and cost increases across the board.
Liz Copan/For the Summit Daily News

Editor’s note: This story has been updated with correct figures for the town of Breckenridge.

Summit County’s towns have begun to see the effects that inflation and short-term rentals have had on sales tax numbers for 2022. 

Compared to the summer of 2021, Summit County’s rainy summer season generally brought a decrease in revenue, according to past reporting. This was supported by a data released by Destimetrics, a business intelligence branch of Inntopia that collects data from different vacation destinations. The study showed guest lodging was down across 17 mountain towns throughout the West. 

While lodging numbers are down, the second part of that survey showed costs increased nonetheless. Inflation also increased over the summer, reaching 9.1% in June, the high so far for 2022. 

With numbers in through the end of July, all of Summit County’s towns and unincorporated areas of the county saw an increase in sales tax revenue from 2021 in the first half of the year, though July’s monthly numbers may indicate changes could be on the horizon.

For sales tax collections, unincorporated Summit County saw a year-to-date increase of 26.12%, which is almost a $1.4 million increase in revenue. Frisco saw a year-to-date increase of 13.3%, or a $914,285 increase. Breckenridge reported a year-to-date increase of 18.62%, just under a $6.25 million increase. Dillon saw a year-to-date increase of 13.81%, about a $699,805 increase, and Silverthorne saw just over a $1.08 million revenue increase, a year-to-date increase of 12.54%.

Frisco Finance Director Leslie Edwards said the first half of the year most likely rode on the coattails of 2021, and some sectors also likely collected more sales tax on fewer overall sales due to inflation. 

“I think we were relatively busy and we also experienced some increases related to inflation,” Edwards said. “I think the grocery sector is a great example of that, where you can have an increase in sales tax, even without a volume increase, because prices are increasing.”

Edwards did find one surprise amongst the sales tax numbers.

“It is pretty remarkable how much short-term rentals do continue to increase,” Edwards said. “We continue to see large increases in that lodging industry.”

Unincorporated Summit County also saw a big increase from the short-term rental tax. 

“You can see how much licensing those units and bringing them into a licensing program has led to increased tax revenues,” Summit County Finance Director David Reynolds said. “We’ve seen huge growth in that category.”

Short-term lodging accounts for nearly half of revenue generated from the different Summit County sales tax categories. 

The hotel trade and lodging tax, as well as the lodging tax from short-term rentals and restaurants, were all up and doing better than the prior year for the town of Dillon. Dillon Finance Director Carri McDonnell said this year’s increase was a surprise to the town because of how successful last year was for Summit businesses. 

Although towns are reporting year-to-date increases in revenue, July numbers were generally not as strong.

Frisco’s sales tax revenue saw a 10.5% increase in June compared to a year prior, but only a 4.7% increase in July. Unincorporated Summit County saw July sales tax revenue drop 1.69% from 2021, compared to a 9.13% increase from June 2021 to this year.

Breckenridge sales tax revenues, which started strong, have fallen short of 2021’s collections in May, June and July. May sales tax collections were 0.04% lower, June dropped 4.61% and July decreased 7.09%.

Dillon’s July collection numbers showed a sales tax revenue increase of 13% compared to July the year before, whereas June had a 16% increase.

Most towns shared that the year has been good for revenue, though both McDonnell and Edwards said their towns would likely begin to tighten budgets in the light of July’s weaker numbers. 

Edwards mentioned the looming possibility of a recession, but emphasized that officials are currently working to make sure they stay in budget regardless of how the year goes.

“We’re just trying to be very conservative,” she said. 

McDonell shared a similar sentiment.

“We are budgeting flat for the rest of the year,” McDonnell said. “So we’re not anticipating any growth in sales tax the rest of this year when we come to doing our 2023 budget.”

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