Delta County Sales Tax Revenue Jumps in 2019

JoAnn Kalenak, DCCR Blogger —

Taxation is a big deal in Delta County. In the results of the most recent election where all tax increase initiatives failed — including a sales tax increase that would have helped fund local law enforcement — voters spoke clearly about their aversion to higher taxes.

The good news is that 2019 sales tax revenue for Delta County government increased 11% over revenue collected in 2018. (There was a 20% increase in the month of December, alone.) The county collected $6,840,166 in sales tax revenue in 2019 and $6,158,531 in 2018, both record highs.

Delta County’s 2019 budget estimated a modest $5,000,248 in sales tax revenue but collected 37% more than anticipated. For 2020, county administrators plan for $5,971,940 in sales tax revenue while state indicators expect similar growth seen in 2019.

The increase created a big jump in the county’s year-end revenue and the Sheriff’s department was one of the beneficiaries, reaping some $200,000 in allocations and added staff just before the 2019 fiscal closing last December.

According to the Colorado Department of Revenue, many Colorado counties experienced higher than expected sales tax revenue including Delta County. While data on revenue sourcing is not made public due to taxpayer privacy policies, the state department did report that more than 65% of the increases came from the retail sector. This percentage is likely to rise once December returns are fully collected and entered into the state’s system. (It is the state’s practice to release aggregated data only when there are at least three taxpayers in a given category and none of them represents more than 80% of the total. Because Delta County’s commercial sector is small, detailed industry data is kept private.)

DCCR asked County Treasurer, Lisa Tafoya, about whether the increases in retail sales tax collection might be due to new online tax collection laws that now add local tax to purchases delivered to Delta County. “(I) identify the percentage of change in both the year-to-date comparison and the five year average. I give no opinion as to what may or may not have contributed to the change that is reflected,” responded Tafoya in an email.

Beginning Dec. 1, 2018, a new federal law allowed states to charge a tax on out-of-state sellers even if the company doesn’t have a physical presence in their state. A handful of states, including Colorado, passed laws to collect sales tax on online purchases based on the point of delivery and not on the point of origin. More specifically, out-of-state retailers that have 200 transactions or $100,000 in business, within a one-year period, are required to collect and pay sales tax to Colorado if the delivery address is inside the state.

While the new law may hurt some businesses that located themselves in places with little or no sales tax in order to cut costs, it may help small counties like Delta County where product availability is limited and online buying is becoming common practice.