May 20, 2026

Consumers continued to spend more than last year, driving an increase in Sioux Falls sales tax revenue in April.

Through April, sales tax revenue was up 6.6 percent for the year, compared with less than 1 percent a year ago. The collections total for 2025 was up 2.4 percent from the previous year.

“So a bit of a bright spot,” director of finance Shawn Pritchett told the City Council on Tuesday.

Sales tax revenue for the month of April was up 6.9 percent from April 2025.

April sales tax revenue typically represents actual sales in March.

On a rolling 12-month average, sales tax revenue is up 4.3 percent, which is getting to be on par with historical averages.

The city is waiting on numbers from the state of South Dakota by industry that would further illustrate what’s driving the growth.

Entertainment tax revenue was up 8.8 percent through April. In 2025, it ended the year down almost 1 percent.

“Again, we’re seeing things move in the right direction,” Pritchett said. “Overall, we’re still seeing pretty strong growth.”

Lodging tax revenue was up 12.3 percent on a year-over-year basis although it included a correction from the state Department of Revenue. The business improvement district tax was up 15.9 percent in April, “so we’re seeing some strong activity there,” Pritchett said.

“I do think we’ve seen some recovery, particularly in the hospitality and lodging side.”

Pritchett also looked at broader economic factors that could impact Sioux Falls.

Inflation saw a “significant uptick” with food cost inflation at 3.2 percent in April, up from 2.7 percent the prior month. The energy index is up 17.9 percent for the 12 months ending in April.

“So you are seeing significant increases there,” Pritchett said. “It’s that overall number at 3.8 percent, you see a fairly significant jump. … It’s the highest it’s been since May of 2023.”

The city is monitoring fuel costs and purchases off bid pricing, which is less than buying it as consumers do.

“As of right now, we don’t see a major impact to the budget that would require us to do a supplemental,” Pritchett said, while adding inflation does “squeeze” the general operating fund and could impact how much is left at the end of the year.

U.S. consumer sentiment dropped to 48.2 in May, the lowest point on record since the 1950s — an “ironic” indicator given the city’s sales tax increases, he said.