Nov. 20, 2024

For the second consecutive month, Sioux Falls sales tax revenue is tracking behind last year.

“We’re continuing to see those revenues lagging as we’re continuing on this year,” director of finance Shawn Pritchett told the City Council on Tuesday.

Sales tax in October, which represents September sales, was down 0.9 percent, following a 0.6 percent drop in the previous month.

Year to date, sales tax is up 1.4 percent from 2023.

October’s drop compares to “a lackluster growth month at the same time last year,” Pritchett said, adding that he anticipates some headwinds in the final two months of the year.

“I wouldn’t doubt we might see our overall revenues being less than 1 percent growth rate when we get through the end of the year,” he said.

The entertainment tax was down 1.8 percent in October compared with this time last year, while tracking up 3.3 percent year to date.

“Much of that is due to the restaurant industry,” Pritchett said.

“They were down 2 percent this month, and it’s the first time since March 2021 that we’ve seen a reduction of growth in that area, so we’ll continue to monitor that.”

Looking by industry, the trend shows growing softness in consumer spending and some leveling off in business-related activity, Pritchett said.

The lodging tax was down 8.2 percent for the month but up 2.9 percent year to date.