• Equus

Taxable Sales During The Pandemic: A Tale of Two Economies

Updated: Sep 11, 2020

During the first six months of the year, the COVID pandemic has created clear haves and have nots in terms of where Coloradans spent money, both by sector and geography.

‘Netflix and Chill’ Wins Out

Shelter-in-place and social distancing orders effectively shut down the hotel, restaurant and entertainment industries. These sectors started off the year on a strong note but have struggled from March onward as taxable sales ranged from -25% YTD at restaurants to -40% at hotels.

With non-essential retailers, hotels and restaurants closed or limited in capacity, grocery stores and online retailers were the clear beneficiaries as more food and entertainment were consumed at home and necessary purchases still had to be made. Statewide YTD online taxable sales are +172% and +10% at grocery stores from year-ago levels. A 2018 US Supreme Court decision allowing for sales tax to be collected on online sales and better collection systems by the State has helped boost the online figure.

Lastly, forced isolation/stay-at-home may have caused many Coloradans to rethink their living spaces to accommodate multiple work/school schedules now taking place under one roof. Sales at home improvement stores are +21% YTD.

Shop Local

At the local level, urban and tourism communities have been the clear losers while suburban communities the clear beneficiaries. As downtown offices closed and business/leisure travel halted, the consumer’s dollar stayed closer to home.

Denver, heavily reliant on the daily influx of workers commuting downtown, has seen taxable sales fall nearly -18% YTD through June. Large entertainment and convention scenes added further headwinds.

Aspen and Vail’s tourism industry suffered as ski slopes shuttered and vacations cancelled. March accounts for the second-most productive month, from a taxable sales perspective, for these two towns given the spring break holiday. The shutdown couldn’t have come at a worse time as sales were down over -45% for both in March. This created a hole tough to climb out of as YTD sales in Aspen and Vail are -13% and -19%, respectively.

In contrast, bedroom communities such as Arvada (+12% YTD), Gypsum (+8% YTD) and Basalt (+6% YTD) have seen boosts to city coffers. A larger portion of homes occupied by primary residences and an outsized portion of citywide sales come from sectors that have worked during the pandemic has helped these communities.

Gypsum houses many workers serving Vail and lists Costco as the largest sales tax generator. Basalt has benefited from a combination Whole Foods/City Market to draw higher-spend Aspen traffic as well as local consumption. Lastly, Arvada’s top ten sale tax generators includes Wal Mart, Target, five grocery stores and Home Depot. All have performed well and combined account for nearly 30% of sales in the City.

Pick Your Places

The COVID pandemic has formed two economies and effectively accelerated what would have been years, if not decades, of innovation and consumer behavior into a few months. An awareness by investors to see where the consumer dollar is headed and how it is spent, rather than where it has been, is paramount to navigating recessionary times.


This report is for informational purposes only and should not be considered a solicitation to buy or sell any security. Past performance is not indicative of future results. Neither Equus Private Wealth nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Nothing herein is intended to provide enough information to make an investment decision. Investing in securities exposes the investor the risk of loss of principle. Redistribution is prohibited without the express written consent of the Equus Private Wealth Management, LLC. Data for this report comes from St. Louis FRED Economic Database.