Lake Havasu City’s sales tax revenue set a new record last year, with one month to go.
According to the Arizona Department of Revenue’s latest monthly report, Havasu brought in a combined $35,506,875 from its 2% municipal sales tax, 3% resort tax, and $1 restaurant and bar tax. % in the first 11 months of FY 2021-22 through May. The total for the first 11 months of the previous fiscal year is already $92,708 higher than Havasu’s record sales tax revenue for the 2020-21 fiscal year.
Havasu’s sales tax revenue has been rising steadily every year for more than a decade since the end of the Great Recession. But steady growth exploded during the pandemic in fiscal 2020-21 to a record $35,414,167, about $7 million more than the previous year. Sales tax revenue has been steadily increasing ever since. Havasu collected more sales tax in each month of the 2021-22 fiscal year than in the same month in the record-breaking 2020-21 fiscal year.
The city currently forecasts a total of $38,871,107 in sales tax revenue last year, which will be finalized once the state releases revenue figures from June. That would be about $3.4 million more than the current record.
In April, Havasu’s sales taxes generated $3,747,675, or 7.5% more than in April 2021. Havasu followed that with $3,464,979 in collections in May – an increase of 0.4 % over May 2021 which was the lowest year-over-year growth of any month. reported so far.
In total, sales tax revenues increased by 10.4% during the first 11 months of the fiscal year, compared to the same period the previous year. Revenue also exceeded budget by nearly $10 million (33.3%) in the first 11 months.
Havasu’s three transaction privilege taxes generated more revenue this year, driven by an 11.1% tax increase on restaurants and bars from FY2020-21 to FY21 -22. The 2% municipal sales tax brought in 10.5% more in the first 11 months than in the prior year, and the hotel/motel tax brought in 9.5% more revenue.
But sales tax growth appears to have slowed as summer approaches in April and May. In April, the bed tax brought in $251,256, down 1.1% from April 2021. But the municipal sales tax rose 8.5% with $3,314,531 in revenue and restaurants and bars generated $181,887 for a 3.2% increase from April 2021. Then, in May, the hotel/motel tax decreased by 6.1% from 2021, while the restaurants and bars fell 3.6% from May 2021. The only reason overall sales taxes rose slightly in the month was due to the 1.2% increase in revenue. via the 2% municipal sales tax.
Every industry in Havasu generated more sales tax in the first 11 months of fiscal year 21-22 than in the previous year, with the exception of the communications and utilities industry which is down 17.8%.
The “other” category saw the largest percentage increase with a 27.5% jump from the previous year, followed closely by the 25.4% increase in use tax and a 22% of the sales tax generated by the construction industry. The retail marketplace category grew by 21.6%, compared to a 6.5% increase in the retail category. Restaurants and bars increased by 13.2%, accommodation by 9.8% and rental, leasing and licensing by 1.2%.
Retail sales are the largest contributor to Havasu’s sales tax collections each year, accounting for a total of $20,263,484 in taxes during the first 11 months of the previous fiscal year. This is a 7.7% increase over retail sales tax from July to May in fiscal year 20-21. Collections in April 2022 were 4.8% higher than those in April 2021, while revenues in May were up only 0.8% compared to the same month in 2021.
Overall, retail sales in May appear to have been dampened by a 10.7% decline in motor vehicle and parts sales in May 2022 compared to May 2021. Motor vehicle and parts sales are the largest retail category in the city – accounting for around a third of all retail sales. Physical retail stores also produced slightly less sales tax revenue in May 2022 compared to 2021 with a decline of 1.4%.
But lower sales tax revenues in two retail categories were offset by gains in all others. Non-store retailers – mostly online stores – produced 11.6% more sales tax in May 2022 compared to May 2021. Food and beverage stores rose 3.8%, materials construction, lawn and garden increased 3%, and home furnishings and appliances increased. also up 3%. The “other” retail category also increased by 15.7%.