City sales, entertainment tax revenue reflects ‘lackluster’ end to summer

Oct. 17, 2024

Consumers seemed to be pulling back on spending to end the summer, according to the latest financial report from the city of Sioux Falls.

Sales tax revenue in September, which largely reflects sales activity in August, was down 0.6 percent versus the same time last year, reflecting a “pretty lackluster” month, according to director of finance Shawn Pritchett.

He delivered the numbers in a monthly report to the Sioux Falls City Council on Wednesday.

Overall city sales tax revenue was up 1.6 percent through September, versus 3 percent at the end of 2023.

The entertainment tax was up 3.9 percent year to date, though it barely grew in September.

“It too was pretty lackluster,” Pritchett said. “We only grew 0.2 percent in September, driven by some pretty low restaurant numbers, 1 percent growth overall, and that really drives the entertainment tax.”

The lodging tax grew by 5.2 percent, driven more by rate increases than occupancies, which have been steady or slightly below last year, he said.

By sector, department store sales were up 3 percent, but grocery fell 2 percent, wholesale trade was down 10 percent, and the category of lumber, hardware and garden was down 11 percent. Remote, or online, retail sales were up 6 percent, but that’s not as high as in prior months, Pritchett said.

“They certainly aren’t growing as robustly as we’ve seen during stronger economic times,” he said. “You’re seeing impacts of the consumer pulling back.”

Inflation stood at 2.4 percent in September, the lowest it has been since February 2021.