Dec. 18, 2024

In November, Sioux Falls sales tax growth edged ahead of last year for the first time in three months.

Revenue for November, which largely represents sales in October, was up 3.5 percent versus November 2023.

Year-to-date, sales tax is up 1.6 percent.

“We had a slightly positive month overall with November collections,” director of finance Shawn Pritchett said in a report Tuesday to the City Council. “So good to see that ticking upwards a little bit.”

The entertainment tax is up “a healthy 4 percent” for the year, he added.

“We saw a very good month in November for the entertainment tax.”

Revenue from the entertainment tax was up 11 percent compared with the same time last year. Restaurants were up 7 percent, but the biggest jump was harder to explain — a $6 million, or 211 percent, increase from department and general merchandise stores, “which seems like an aberration, and I don’t know what’s driving that,” Pritchett said.

There aren’t many items other than hot food and alcohol that are subject to the entertainment tax in those types of stores, he explained.

By sector, a number of business-related categories were down. Manufacturing was down 9 percent for the month, wholesale trade was down 3 percent, and lumber was down 7 percent. Business services was up 27 percent, though that tends to be an erratic category — “up high, down low, doesn’t really follow a lot of patterns,” Pritchett said.

Utilities were up 13 percent, which contributed to the overall growth in sales tax, and grocery and department stores essentially were flat in sales tax collection.

Remote retail was still strong, up 8 percent, while home furnishings was down 2 percent, which is a slight improvement “from some of the deterioration we’d seen,” Pritchett said.

A lot of miscellaneous categories also did well, he said.

Lodging tax was up 14 percent for the month. Occupancy for the year has trended down slightly, but prices have remained about average, he said.

“So it’s nice to see a bounce-back there, and that’s with 546 more rooms in inventory for the community,” he said.

The next sales tax report won’t be delivered until April, when year-end financials will be reported.