25 businesses play huge part in town sales tax. Online shopping growing
By Mark Reaman
In a report to the Crested Butte Town Council meant to give a high-level view of the town’s financial situation, details indicate summer continues to be the driver for the town’s economy. July, August and September are the top three months for sales tax collections in Crested Butte, followed by March and December. April is the slowest month for the town.
Crested Butte finance director Rob Zillioux presented the financial summary, based on preliminary numbers. It contained a number of facts and trends. The report states, “Town business revenue is generally healthy and growing in concert with local visitation increases. Tax collections were $121,000 above the budgeted amount.” The 2018 numbers were up 4.6 percent over the previous year.
One interesting trend is that online mail order business continues to grow at a faster pace than local businesses. “Sales tax collections from the top ten out-of-state businesses grew a collective 71 percent,” according to the report. Such businesses would include organizations like Amazon, Apple and Verizon. Out-of-town sales tax brought in about $256,000 in 2018. The town is actively pursuing sales tax from such online retailers but that hasn’t always been the case and the town missed out on revenues as a result.
“Keep an eye on these retailers versus our local retailers,” said Zillioux. “As more people order things online it can impact our local businesses pretty dramatically.”
While specific businesses cannot be identified with their sales tax numbers, Zillioux made clear that Elk Avenue is the financial heart of town. The outlying commercial areas also play a significant role. “We are highly dependent on Elk Avenue and the outlying commercial districts for our tax base,” he noted. “We can’t name specific businesses but it isn’t hard to see. And most of the big contributors are tourism-driven.”
The largest single individual sales tax contributor to the town coffers paid $304,215 in sales tax to the town. Zillioux said the top five businesses in town contributed 18 percent of the total sales tax revenue. The top 25 businesses accounted for 44 percent of total sales tax collection. Zillioux said out of the top 25 businesses in Crested Butte, 20 of them had positive growth in 2018 compared to 2017.
Overall, the town’s general fund revenue came in at $468,000 above expenses, thanks to tight management, the increase in sales tax and some projects such as the Big Mine Warming House expansion not moving forward.
The legal budget line item was $285,811 in large part because of lawsuits filed against the town and the upcoming Cypress Equities Slate River annexation process.
The 3 percent real estate transfer tax garnered $1.5 million in 2018, slightly down from 2017. The new short-term rental excise tax that went into effect in 2018 brought in $285,447 to the town for future affordable housing projects. It had been expected to raise about $275,000.
Generally, Zillioux said the town is on solid financial footing with reserves totaling $4.2 million. The council has set a goal to have one year’s worth of operating expenses in reserve in case of a sudden economic downturn or an unforeseen emergency. The town is at 86 percent of that goal.