Sales tax revenues in Summit County were increasing year after year before March 2020, and although the pandemic hit the community hard the most recent figures underscore the continuing economic resurgence.
Matt Leavitt, the county’s financial officer, is slated to provide the Summit County Council with a first-quarter financial update on Wednesday, but with the lack of county expenditures during the first half of the year, the report is focused on how much the county has earned through sales taxes — which help fund operations.
Park City was the municipality in Summit County that was hit the hardest by the pandemic, with revenues decreasing by around 10% between 2020 and 2021, according to a report prepared in anticipation of Wednesday’s meeting. Park City received around $2.25 million in local sales tax revenues in 2020 but the number dropped to around $2 million last year.
But during the first quarter of 2022, revenues countywide have increased significantly compared to the same period in 2021.
According to data compiled by Leavitt, the local sales tax, which is a 1% tax imposed on goods and services, increased by nearly 24% while the county option, a 0.25% countywide sales tax, increased by almost 28%. Year to date, local sales tax revenues increased in the county by almost 24% between 2021 and 2022.
So far, in the first quarter of 2022, Park City has earned just under $3 million from local sales tax revenues.
Despite the pandemic, Kamas also experienced significant growth in local sales tax revenues, which increased by about 13.5% every year between 2019 and 2022. The city has brought in about $225,000 in sales tax revenues this year.
Leavitt said the benefit came from people staying home and seemingly purchasing more goods online rather than in person. Typically, sales taxes from online purchases go to the community where the item was procured, so when people began staying home rather than traveling or commuting, a portion of their money returned to the community.
While online retail sales increased, Leavitt said there was also a change in the other industries that contributed to local and county taxes.
He was surprised to see the transient room tax, or the 3% tax on short-term, nightly rentals, grow exponentially. Over the last two months, the revenue is 90% higher countywide than in 2021. Restaurants, which were also hit hard by the pandemic, appear to be bouncing back, too.
For the first fiscal quarter of 2022 unaccrued revenues for the transient room and restaurant tax were $6.2 million and $1 million, up about 82% and 43%, respectively, compared to the first quarter of 2021, according to Leavitt.
Revenues from the transient room and restaurant taxes cannot be used toward county operations. Instead, they are funds dedicated to supporting tourism and economic development as well as cultural and recreation facilities.
Leavitt said that it’s important to monitor sales tax revenues because it allows the county to determine if and when it should expand operations as well as the level of service it can provide. It also provides insight into the overall financial health of the community.
Although the county appears to be in a good spot with the significant growth of the sales tax revenue, Leavitt said it’s also a bit nerve-wracking.
“There’s a bit of fear. How long is this sustainable? When the bubble pops, what will the impact be?” he said. “It’s somewhat similar to a recession where we’re seeing something burst and go south. You start to worry about when the revenue will decrease.”