Sioux Falls sees growth in sales tax collections

Your Money Matters

At first glance busy stores, more new buildings, and a landmark court case have little to do with each other. They all add up to a good year for Sioux Falls’ bottom line. The City is bringing in more sales tax money. This fall is shaping up to be stronger than last fall, heading into the holiday shopping season.

The numbers have been rising steadily since 2017. Here’s a look at just the couple of months. In August, the city collected nearly 12-percent more sales tax money than a year earlier. In September, the city collected eight-percent more than last year.

Halloween hasn’t officially happened yet, but if you own a store like Sara Jamison, it’s beginning to look a lot like Christmas.

“I love the traffic that we have on Phillips Avenue, but I’m excited for more traffic the holiday season will bring,” Jamison said.

Jamison says business has been good just in the six months her boutique, Terra Shepherd, has been open.

“Business, so far, has exceeded my expectations. I’m just excited to see what the rest of the year brings,” Jamison said.

Terra Shepherd’s brick and mortar location and online store are contributing to sales tax growth in Sioux Falls. City Finance Director Shawn Pritchett says there are a few reasons why numbers are good right now.

“Continued growth of the city. I think we’ve seen a continued strong economy, locally. We have extremely low unemployment. Retail sales and so forth remain strong,” Pritchett said.

Then there’s the Wayfair effect. More than a year ago, the U.S. Supreme Court decided the case of South Dakota vs. Wayfair. The high court said states can force online shoppers to pay sales tax. The decision was seen as a win for states. Pritchett says there are indicators that it’s helping the city.

“We haven’t seen definitive numbers from the state as to the direct impact to our community as they continue to line out what that looks like for our city,” Pritchett said.

It’s not quite the holiday season yet, but Jamison says glimpsing positive growth in sales tax in the city is a gift to her and her peers.

“When those numbers are thriving, it means businesses are thriving. That’s good for us, too,” Jamison said.

Pritchett expects four-percent growth next year. He’s cautious about future growth, because you need to take the national economy and the farm economy into consideration.

“We haven’t seen a dramatic loss on the sales taxes so far related to the ag economy and they’ve been hurting for several years, but I certainly think this is the most difficult and challenging year they’ve had so far,” Pritchett said.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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