SIOUX FALLS, S.D. (KELO.com) — The COVID-19 pandemic led to a steep drop in tax revenue for Sioux Falls in May, but the loss of revenue was not as harmful as expected.
“When you talk about sales taxes and entertainment taxes, they are down significantly, but the story is better than what we were necessarily modeling,’ City Finance Director Shawn Pritchett told the City Council when presenting the May financial report Tuesday.
Sales tax revenue was down 13% compared to May of last year. Entertainment tax revenue fell by 47.3%. Pritchett said he expected a drop of closer to 60% in entertainment tax revenue.
Revenue declines are stark in areas of the economy hit hardest by COVID-19. Compared to May of 2019 Sioux Falls lost $18.9 million in revenue from restaurants and bars alone. Clothing stores and hotels also saw steep declines.
Some businesses saw an uptick. For example, revenue from lumber, hardware and garden suppliers was up 13% year-over-year, and revenue from liquor stores was up 74%.
