Say it’s a Sunday in August. Visitors stroll Buena Vista’s downtown sidewalks, diners nosh and swig in the open-air courtyards, and a parking spot on Main Street is hard to find.
It’s an upbeat snapshot, given that most everything these days gets viewed through the COVID-19 lens. And indeed, brick and mortar businesses in town struggled through the spring during “Stay-at-Home”.
If you look at sales tax collection, 2020 is showing 19.95 percent better as of June than the same time in 2019. From a budget standpoint, collections are 15.33 percent above town projections. July’s figures, due to be released around Sept. 10, should help round out the picture, seeing as July is typically Buena Vista’s biggest month.
“The Town is pleasantly surprised how healthy our local economy has remained through the spring and summer seasons,” said Town Administrator Phillip Puckett. “Many businesses have experienced a very busy summer in terms of numbers of customers and sales. As a result, our town sales tax revenues have remained positive.”
But there are caveats to the data.
“When looking at sales tax revenue from local businesses, we have been down from 2019 for each month between March and June,” he continued. “This is not overly surprising since we experienced a “Stay-at-Home” public health order March, April, and May. The town will be working with partners such as the Chaffee County Economic Development Corporation and the Buena Vista Chamber of Commerce to help our businesses and nonprofits as we enter the fall and winter seasons.”
In addition, remote sales are accounting for an increasing percentage of collections. “While our overall sales tax revenues are up from 2019, we have to be aware that not all local businesses are thriving,” Puckett said. “Sales tax from remote sellers has risen significantly since 2019, which is accounting for our overall increase.”
In June, for example, remote sales comprised 16 percent of the town’s $317,095 in collections, whereas in June 2019 they accounted for nine percent of the town’s $300,548 in collections.
“A remote seller for Buena Vista relates to businesses that make sales to someone in Buena Vista but doesn’t have a physical presence in BV,” explains Buena Vista Finance Director/Treasurer Michelle Stoke. “For instance, if you order something from Home Depot online, since we don’t have a Home Depot in BV, the Home Depot Online system is now required to collect and remit sales taxes to BV.”
The remote seller issue came about in Wayfair v South Dakota, with the Supreme Court ruling in 2018 that sales tax must be remitted to the taxing jurisdiction of the purchaser in the case of online purchases. In response, Colorado passed legislation that said a remote seller was an entity that did not have a “brick and mortar” store in Colorado and was required to remit sales tax to Colorado.
“Prior to the Wayfair ruling, some online sellers would collect and remit and some wouldn’t,” Stoke said. “It was kind of all over the board.
“To be sure, Colorado Department of Revenue has made improvements in how sales taxes are collected, but that is not all of it. We are still figuring out all of the contributing factors of what makes up remote sales tax.”