Colorado sales tax revenues reached $3 billion in the fiscal year 2019 and were up 5.1% from the prior year.
The state of Colorado is facing a $3 billion shortfall for the current and next fiscal year. However, the state is taking in more sales tax than ever before now that online sellers, such as Amazon, charge Colorado customers at purchase. Last year, Colorado collected nearly a half-billion dollars more in annual sales taxes than in 2016, when Amazon began the practice. With more brick-and-mortar stores also going online and eCommerce seeing an overall increase, the pandemic impact on the state sales taxes wasn’t as bad as you might have expected.
“Online sales certainly have helped,” said Brian Lewandowski, executive director of the Business Research Division at the Leeds School of Business at the University of Colorado. “That’s welcome new money that they would otherwise be foregoing. And we know that eCommerce was chipping away at brick-and-mortar sales anyway, so the fact that they’re able to collect some of that revenue also buffers the decline that they would otherwise be seeing right now.”
In a May report, the Governor’s Office of State Planning and Budgeting revised its 5% sales tax growth expectation to a 1.8% drop this fiscal year.
For more information: The Colorado SunThe Colorado Sun
by: Tamara Chuang
June 3, 2020