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HomeMy WebLinkAboutMemo - Mail Packet - 5/19/2020 - Memorandum From Travis Storin And Jennifer Poznanovic Re: April 2020 Sales And Use Tax Collection Report1 Finance Administration 215 N. Mason Street PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com DATE: TO: May 8, 2020 Mayor and City Councilmembers THROUGH: Darin Atteberry, City Manager FROM: Travis Storin, Interim Chief Financial Officer Jennifer Poznanovic, Senior Revenue Manager RE: April 2020 Sales and Use Tax Collection Report Attached is the April 2020 Sales and Use Tax Collection Report. Information below provides Council context behind the numbers in the report. Year-to-Date Results Note regarding impact of COVID-19: The cumulative results reflect the impact of the pandemic on a limited basis only. Sales taxes are collected in the month following retail sales (i.e. March’s taxable sales are collected in April). To that extent, only the first 2 weeks of shutdown are reflected herein. 1. Sales Tax – While the first quarter sales tax revenue was over budget, April revenue declined 7.7% leaving year-to-date growth of 1.0% over the first four months of 2019. Sales tax revenue is under budget $186K impacting the General Fund (GF) by an estimated $118K. 2. Use Tax – Year-to-date use tax is down 6.0% over 2019, resulting in a $400K use tax budget shortfall. Impact to the GF is approximately $236K. 3. Total Sales and Use Tax – Year-to-date revenue is below budget by $586K. Month-to-Date Results $000's YTD Budget YTD Actual Over/ (Under) Sales Tax $ 39,250 $ 39,064 $ (186) Use Tax 6,672 6,272 (400) Total $ 45,922 $ 45,336 $ (586) Total Sales & Use Tax Revenue $000's 2019 Actual 2020 Actual Amount Sales Tax $ 9,569 $ 8,829 $ (740) Use Tax 1,979 1,417 (562) Total $ 11,548 $ 10,246 $ (1,302) April Sales & Use Tax Revenue DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 Overall, April sales and use tax revenue is $1.3M less than April 2019. Use tax is volatile and largely driven by development and business investment. Many sales tax categories saw significant changes from last April. Grocery, Convenience, Liquor is up nearly 30%, while Vehicle Sales, Parts and Repair, Restaurants, Caterers and Bars, Clothing and Accessories, and Lodging are down between 25% to 61%. These sales tax category shifts align with finance staff projections. Council has been briefed on a range of scenarios for revenue shortfall and is scheduled for a status update at the May 18th Council Finance Committee meeting. DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 1 Financial Services Sales Tax Division 215 N. Mason Street – 2nd Floor PO Box 580, Fort Collins, CO 80522-0580 970.221.6780 970.221.6782 - fax fcgov.com Sales and Use Tax Collection Report – April 2020 Issued April 11, 2020 This report reflects Sales and Use Tax collected in April for economic activity that occurred in March. Please note the sales and use tax collected in April is predominately from March sales but also includes delinquent collections from prior periods. APRIL SUMMARY OVER PRIOR YEAR Month Year to Date Net Sales Tax Collected: -7.7% 1.0% Net Use Tax Collected: -28.4% -19.6% Net Sales and Use Tax Collected: -11.3% -2.5% Year to date, sales and use tax collections excluding rebates are down 2.5% and total $45.3M. APRIL SUMMARY OVER BUDGET Month Year to Date Net Sales Tax Collected: -10.0% -0.5% Net Use Tax Collected: -14.7% -6.0% Net Sales and Use Tax Collected: -10.7% -1.3% Year to date, the City has collected 1.3% less sales and use tax revenue, totaling $586K under budget. Figure 1. Budget to Actual - Sales and Use Tax Collected After Rebates DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 2 April Sales Tax Collected. In April 2020, sales tax collected in Fort Collins decreased 7.7% compared to April 2019. Sales tax collected totaled $8.8M compared to $9.6M in 2019. April Use Tax Collected. The total use tax collected in April was $1.4M, a decrease of 28.4% compared to April 2019. Net Sales and Use Tax Collected. Total tax collected of $10.2M was 11.3% lower than April 2019. Figure 2. Sales and Use Tax Collected Actual 2019 Actual 2020 % Change Actual 2019 Actual 2020 % Change SALES TAX COLLECTIONS Grocery, Convenience, Liquor $1,256,147 $1,625,817 29.4% $5,587,353 $6,126,652 9.7% Restaurants, Caterers and Bars 1,582,445 964,654 -39.0% 5,926,918 5,235,156 -11.7% General Merchandise 831,512 883,447 6.2% 3,499,886 3,611,816 3.2% Vehicle Sales, Parts and Repairs 701,047 524,717 -25.2% 2,740,894 2,833,575 3.4% Building Materials, Garden Equipment & Supplies 694,360 791,302 14.0% 2,675,457 2,880,561 7.7% Sporting, Hobby, Book, Music 383,003 267,230 -30.2% 1,804,818 1,538,186 -14.8% Broadcasting and Telecommunications 428,695 343,192 -19.9% 1,762,025 1,415,863 -19.6% Electronics and Appliances 386,341 361,537 -6.4% 1,655,647 1,833,356 10.7% Miscellaneous Retailers 804,650 845,177 5.0% 3,230,429 3,587,546 11.1% Utilities 524,459 448,818 -14.4% 1,950,757 1,834,796 -5.9% Clothing and Accessories 359,671 184,629 -48.7% 1,439,692 1,227,694 -14.7% Pharmacy, Salon and Laundry 471,300 527,429 11.9% 1,815,741 2,061,453 13.5% Other 250,132 286,628 14.6% 1,067,928 1,181,528 10.6% Rental and Leasing Services 232,054 226,025 -2.6% 859,944 869,432 1.1% Furniture and Home Furnishings 184,985 153,437 -17.1% 787,996 736,057 -6.6% Wholesale Trade 270,332 213,947 -20.9% 853,002 916,984 7.5% Lodging 227,198 88,637 -61.0% 721,147 600,363 -16.7% Manufacturing 180,843 186,179 3.0% 773,525 999,870 29.3% TOTAL SALES TAX 9,769,174 8,922,802 -8.7% 39,153,159 39,490,888 0.9% Less Mall Sales Tax Remittance* (199,740) (93,929) -53.0% (476,928) (426,675) -10.5% NET SALES TAX 9,569,434 8,828,873 -7.7% 38,676,231 39,064,213 1.0% USE TAX COLLECTIONS Building Permits 300,376 422,259 40.6% 1,883,066 1,801,340 -4.3% Car Tax 507,512 610,832 20.4% 2,211,879 2,431,610 9.9% Return Tax 1,171,343 383,694 -67.2% 3,704,938 2,038,689 -45.0% TOTAL USE TAX 1,979,231 1,416,785 -28.4% 7,799,883 6,271,639 -19.6% Less Economic Rebates 0 0 0.0% 0 0 0.0% NET USE TAX 1,979,231 1,416,785 -28.4% 7,799,883 6,271,639 -19.6% SALES & USE TAX COLLECTIONS Total Sales & Use Tax 11,748,405 10,339,587 -12.0% 46,953,042 45,762,527 -2.5% Less Mall Sales Tax Remittance* (199,740) (93,929) -53.0% (476,928) (426,675) -10.5% Less Economic Rebates 0 0 0.0% 0 0 0.0% NET SALES & USE TAX 11,548,665 10,245,658 -11.3% 46,476,114 45,335,852 -2.5% SALES & USE TAX DISTRIBUTION Streets and Transportation (.25%) 709,048 602,022 -15.1% 2,766,960 2,714,539 -1.9% Community Capital Improvement Program (.25%) 709,048 602,022 -15.1% 2,766,960 2,714,539 -1.9% Natural Areas (.25%) 709,048 602,022 -15.1% 2,766,960 2,714,539 -1.9% Keep Fort Collins Great (.85%) 2,388,067 2,035,806 -14.8% 9,224,329 9,165,783 -0.6% General Fund (2.25%) 7,233,194 6,497,715 -10.2% 29,427,833 28,453,127 -3.3% Less Mall Sales Tax Remittance* (199,740) (93,929) -53.0% (476,928) (426,675) -10.5% 3 Figure 3. Budget to Actual - Sales Tax Collected Figure 4. Budget to Actual – Use Tax Collected Figure 5. Budget to Actual – Sales and Use Tax Distribution April Sales Tax Budget to Actual. In April 2020, sales tax collected in Fort Collins was $979K less than budget. April Use Tax Budget to Actual Excluding Rebates. In April 2020, use tax collected in Fort Collins was $245K less than budget. % Year to Date % Over/(Under) Over/(Under) Year to Date Annual Over/(Under) Month Actual Budget Budget Budget Actual Budget Annual Budget January $ 13,232,844 12,331,803 $ 901,041 7.3% $ 13,232,844 $ 12,331,803 7.3% February 8,686,443 8,652,328 34,115 0.4% 21,919,287 20,984,131 4.5% March 8,316,054 8,457,664 (141,610) -1.7% 30,235,340 29,441,795 2.7% April 8,828,873 9,808,202 (979,329) -10.0% 39,064,213 39,249,997 -0.5% May - - - 0.0% - 48,588,847 0.0% June - - - 0.0% - 58,395,603 0.0% July - - - 0.0% - 69,036,186 0.0% August - - - 0.0% - 79,040,353 0.0% September - - - 0.0% - 89,598,707 0.0% October - - - 0.0% - 100,240,368 0.0% November - - - 0.0% - 109,944,142 0.0% December - - - 0.0% - 119,703,200 0.0% Net Collections 39,064,213 39,249,997 (185,784) -0.5% YTD Rebates 426,675 480,000 (53,325) - Total Collections $ 39,490,888 $ 39,729,997 $ (239,109) -0.6% $ 119,703,200 % Year to Date % Over/(Under) Over/(Under) Year to Date Annual Over/(Under) Month Actual Budget Budget Budget Actual Budget Annual Budget January $ 1,863,473 $ 1,674,628 $ 188,845 11.3% $ 1,863,473 $ 1,674,628 11.3% February 1,523,740 1,686,398 (162,658) -9.6% 3,387,213 3,361,026 0.8% March 1,467,641 1,649,111 (181,470) -11.0% 4,854,854 5,010,137 -3.1% April 1,416,785 1,661,540 (244,755) -14.7% 6,271,639 6,671,677 -6.0% May - - - 0.0% - 8,339,996 0.0% June - - - 0.0% - 10,006,432 0.0% July - - - 0.0% - 11,676,634 0.0% August - - - 0.0% - 13,349,849 0.0% September - - - 0.0% - 15,004,797 0.0% October - - - 0.0% - 16,666,619 0.0% November - - - 0.0% - 18,345,202 0.0% December - - - 0.0% - 20,000,008 0.0% Net Collections 6,271,639 6,671,677 (400,038) -6.0% YTD Rebates - 0 - - Total Collections $ 6,271,639 $ 6,671,677 $ (400,038) -6.0% $ 20,000,008 Over/(Under) % Actual Budget Budget Over/(Under) Apr YTD Apr YTD Apr YTD Budget 2,714,539 2,741,175 (26,636) -1.0% Community Capital Improvement Program (.25%) 2,714,539 2,741,175 (26,636) -1.0% 2,714,539 2,741,175 (26,636) -1.0% 9,165,783 9,314,248 (148,465) -1.6% 28,026,452 28,383,903 (357,451) -1.3% 426,675 480,000 (53,325) 100.0% $ 45,762,527 $ 46,401,676 $ (639,149) Fund Total Collections Streets and Transportation (.25%) Natural Areas and Parks (.25%) Keep Fort Collins Great (.85%) General Fund (2.25%) (net of rebates) 4 Figure 6. April Collections* *Total collections after rebates. Figure 7. Year to Date Collections* *Total collections after rebates. DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 5 Figure 9. Local Retail Compared to National Retail Retail Sales Category % Change from March 2019 United States % Change from March 2019 Fort Collins Grocery, Convenience, Liquor 29.3 29.8 Restaurants, Caterers & Bars -23.0 -31.9 General Merchandise 7.5 10.5 Vehicle Sales, Parts & Repairs -23.7 -22.9 Building Materials, Garden Equipment & Supplies 7.6 14.6 Clothing & Accessories -50.7 -46.8 Furniture & Home Furnishings -24.6 -12.0 Total -6.2 -4.3 At the national level, March 2020 retail sales (as reported on April 15, 2020) decreased by 6.2% compared to a decrease in Fort Collins’ sales of 4.3%. March 2020 sales are the basis for the City’s April 2020 sales tax collections and net taxable amounts (which are included in this report). Figure 8. Net Taxable Actual Actual % Actual Actual % $ in Millions 2019 2020 Change 2019 2020 Change SALES TAX Grocery, Convenience, Liquor $44.3 $57.4 29.8% $198.8 $217.9 9.6% Restaurants, Caterers and Bars 40.9 27.9 -31.9% 155.0 141.6 -8.6% General Merchandise 24.6 27.2 10.5% 103.5 104.1 0.6% Vehicle Sales, Parts and Repairs 17.8 13.7 -22.9% 70.9 72.9 2.8% Building Materials, Garden Equipment & Supplies 18.1 20.7 14.6% 69.5 75.3 8.3% Sporting, Hobby, Book, Music 9.9 7.2 -27.3% 43.5 40.2 -7.7% Broadcasting and Telecommunications 11.1 8.9 -19.8% 45.8 36.7 -19.7% Electronics and Appliances 10.0 9.4 -6.6% 42.8 47.4 10.7% Miscellaneous Retailers 21.0 22.3 6.4% 84.3 94.3 11.8% Utilities 13.6 11.7 -14.4% 50.7 47.7 -6.0% Clothing and Accessories 9.4 5.0 -46.8% 36.4 32.2 -11.6% Pharmacy, Salon and Laundry 12.2 13.7 12.6% 47.9 53.9 12.6% Other 6.8 7.8 14.9% 27.2 30.8 13.2% Rental and Leasing Services 6.0 5.9 -1.8% 22.3 22.6 1.2% Furniture and Home Furnishings 4.7 4.1 -12.0% 20.8 19.5 -5.9% Wholesale Trade 7.1 5.9 -16.9% 22.7 24.7 8.8% Lodging 5.8 2.8 -52.7% 18.8 15.8 -15.7% Manufacturing 4.8 5.0 4.2% 20.4 26.4 29.8% NET TAXABLE SUBJECT TO SALES TAX 268.1 256.6 -4.3% 1,081.3 1,104.2 2.1% USE TAX Building Permits 7.8 11.0 40.6% 48.9 46.8 -4.3% Car Tax 13.2 15.9 20.4% 57.5 63.2 9.9% Return Tax 30.4 10.0 -67.2% 96.2 53.0 -45.0% NET TAXABLE SUBJECT TO USE TAX 51.4 36.8 -28.4% 202.6 162.9 -19.6% TOTAL NET TAXABLE SUBJECT TO SALES & USE TAX $319.5 $293.4 -8.2% $1,283.9 $1,267.1 -1.3% April Year to Date DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 6 Figure 10. April - Net Taxable Sales Subject to Sales Tax Figure 11. Year to Date - Net Taxable Sales Subject to Sales Tax DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 7 Figure 12. Metro District Reporting The City’s sales tax rate of 3.85% can be broken into two pieces:  2.25% comprises the Core Base rate and supports general fund activities.  1.6% comprises the Dedicated Base and goes to four specific funds to support activities defined in the ballot language for that dedicated tax. The Foothills Mall agreement outlines a base year of May 2012 to April 2013 to determine the core base sales tax (2.25%) received at $1.8M. Anything remitted to the City above that core base amount will be returned to the Metro District to support debt service. No tax is remitted to the Metro District until the base of $1.8M is reached. The chart above tracks both Core and Dedicated tax receipts for the period of May to April. As of April 30, 2020, the year to date core amount collected is $2.2M resulting in $94K tax due to the Metro District. Sales Tax in the City’s Downtown Area. The sales tax collected in April for the downtown area decreased 26.2% from the same period in 2019. Lodging Tax Collections. The City collected $63K in lodging tax in April 2020. This was a decrease of 58.8% from April 2019. Sales Tax Licenses. There were 13,676 active sales tax licenses at the end of April. $1,778 $171 $362 $558 $741 $940 $1,139 $1,319 $1,502 $1,792 $1,967 $2,111 $2,204 $121 $254 $392 $521 $661 $801 $928 $1,056 $1,261 $1,384 $1,486 $1,553 $1,254 0% 2% 4% 6% 8% 10% ‐ 500 1,000 1,500 2,000 2,500 May 2012‐ April 2013 May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr 2019 2020 Mall Area ‐ 2019‐2020 Sales Tax (in Thousands) Core Base Dedicated Base Core YTD Dedicated YTD Core Level YTD % Change Over Prior Year Core reached: • January 2020 • February 2019 • February 2018 • March 2017 Anticipated ST Sharing with Metro District DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 General Fund Economic Rebates DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12 Less General Fund Economic Rebates 0 0 0.0% 0 0 0.0% NET SALES & USE TAX $11,548,665 $10,245,658 -11.3% $46,476,114 $45,335,852 -2.5% April Year to Date * Per the Mall Redevelopment Agreement, a portion of the sales tax generated at the Mall is remitted monthly to support the Metro District Debt Service DocuSign Envelope ID: 8A369973-E3D4-4A7D-8A14-2E4EE96BFB12