May 17, 2023

After a slower start to the year, consumers seem to be spending fairly robustly in Sioux Falls.

The city’s sales tax revenue grew by 7.6 percent year-over-year in April, reflecting March sales and resulting in a rolling 12-month average of about 9 percent growth. Year-to-date it’s up 5.4 percent.

“We would expect this average would continue to decline as the 12-month average comes more in line with what we’re currently experiencing for sales tax collections and what we expect going forward,” said Tom Huber, assistant city finance director, in reporting to the City Council on May 16.

Entertainment tax revenue, which is more variable month-to-month, was up 9.7 percent in April and up 7 percent year-to-date.

The lodging tax is up 27.4 percent in April year-over-year and up 11.9 percent for the year.

“It spiked up this month,” Huber said. “April’s uptick is probably most reflective of a strong March activity given Summit League and other tournaments in town.”

Inflation has decreased for the tenth straight months, but “it’s a slow trend to the down side,” Huber said.

By sector, the city’s monthly financial report looked at sales tax revenue by industry in March.

Manufacturing saw the biggest increase, with sales tax revenue up $3.4 million, or 13 percent, year-over-year, and wholesale durable and non-durable goods, which is up $5.7 million, or 10 percent. Sales tax for eating establishments grew $4.3 million, or 9 percent.

Declines were seen in lumber, hardware and garden supplies, which saw sales tax revenue decline by $2.3 million, or 5 percent, and home furniture, furnishing and equipment stores, which saw sales tax drop $5.6 million, or 15 percent.