July 22, 2020

Sales tax collections in Sioux Falls fell 9.4 percent in June, but that’s a solid improvement from the 13 percent drop the previous month.

The June report is for sales in May, so “you’re going to see a lot of impact from the pandemic,” finance director Shawn Pritchett told the Sioux Falls City Council this week, adding that COVID-related restrictions on businesses were lifted May 18.

“We’re hopeful to see continued improvement.”

At one time, the city planned for drops of 25 percent up to six consecutive months, he added.

“It didn’t deteriorate as bad as what we had contemplated it might.”

Remote retailer sales in May suggest some people might be gravitating back to in-person shopping. They were up $9.2 million, or 48 percent, year-over-year, compared with an $11.8 million, or 86 percent, increase in April.

Lumber, hardware and garden stores continued to show a 13 percent year-over-year increase, the same as the previous month.

Grocery stores had a 5 percent increase in May compared with an 8 percent increase in April.

The city’s entertainment tax fell 35 percent in June compared with the same time last year. The prior month it was down 47 percent.

“That is a significant improvement over where we were in May, but we have a long ways to go,” Pritchett said, adding it will be a “low rise” and the city anticipates months of negative year-over-year comparisons, though not as bad as the 60 percent drop officials at one time predicted.

Entertainment tax revenue includes tax from restaurants, lodging and bars. May transactions for restaurants were down $10.7 million, or 28 percent, an improvement from the $15.4 million drop in April. Bars showed a 52 percent drop, compared with a 74 percent drop the previous month. Lodging showed a bit of a rebound, down 73 percent in May, compared with 82 percent in April.