Latest sales tax numbers suggest holiday shopping season was mild for Lawrence merchants
photo by: Associated Press
Instead of a mighty “ho, ho, ho,” it was more of a ho-hum holiday shopping season for local merchants, the latest Lawrence sales tax numbers suggest.
The city recently received its February sales tax check from the state of Kansas. Because of ordinary delays in the state’s reporting time, the February check largely represents sales made in December. That, of course, is prime holiday shopping season.
The report shows Lawrence sales tax collections were up 2% from the same time period a year ago. So, not terrible, but basically an increase in line with inflation. It was a different story, though, when it came to online sales tax collections. Lawrence collections from the special online sales tax, called a use tax, were up 17.6% from the same period a year ago.
That would suggest that online holiday sales increased more than the activity that was happening in traditional brick and mortar stores throughout the city. That indeed may have been the case, but it is tough to get a complete picture from these numbers. It is worth remembering that the traditional sales tax numbers encompass more than just retailers. They also include bars and restaurants, hotels, auto dealers and even the utility companies that charge you a sales tax for their services.
It is possible that local retailers may have seen increases a little better than the 2% figure, while other categories fared worse than the average. That generally was the trend in 2019, as hotel, utilities and some types of information service providers were the largest categories to post sales tax declines.
The latest sales tax numbers were an improvement from Lawrence’s January sales tax figures, which represented sales made largely in November 2019. Traditional sales tax collections were down 3.1%, while online use tax collections were down by 12%, marking the first decline in that tax in more than a year.
In that regard, the latest numbers are a clear bounce back. It is a bounce back that City Hall budget-makers gladly will take. The city is counting on sales and use taxes to provide about $41 million in funding for city operations in 2020. The sales tax numbers still have some bouncing to do to get into positive territory for the year. January’s 3.1% decline paired with February’s 2% increase has sales tax collections for the year down 0.5%. That has Lawrence off to a little bit slower of a start to the year than some other major retail centers in the state. Though, the numbers show there is some apparent weakness in the Kansas City, Kan., metro area to start the year. It is rare to see most of the best-performing markets be located outside the Kansas City area. Here’s a look at the year-to-date numbers for just traditional sales taxes. In other words, they don’t include the online use taxes:
• Salina: up 2.6%
• Topeka: up 2.0%
• Sedgwick County (Wichita): up 1.3%
• Lenexa: up 1.1%
• Lawrence: down 0.5%
• Manhattan: down 0.5%
• Olathe: down 1.2%
• Shawnee: down 1.3%
• Kansas City: down 1.3%
• Overland Park: down 3.1%
• Statewide: up 0.2%
These will be numbers to keep an eye on as the year progresses, but it is early enough in the year that this picture could change significantly as more tax returns are received.
In other news and notes from around town:
Lawrence home sales numbers for January also are in. After finishing 2019 down by about 2%, the numbers of homes sold in Lawrence bounced back some in January.
Home sales were up 4% in January, compared to the same month a year ago. But don’t read too much into those numbers. We are only talking a difference of two sales — 49 in January 2020 compared to 47 in January 2019. Like the sales tax numbers, the home sale statistics will become more meaningful as we get a few more months’ worth of data.
The big story to watch on home sales is what happens to average selling prices in Lawrence. The median selling price in 2019 was up about 4%. Since 2015, median selling prices of Lawrence homes have increased by more than 25%.
The January numbers showed median selling prices for the month were down about 11% to $213,250. But again, we’re talking about a small sample size, so it is best to wait and see whether that trend will continue once the home buying season kicks into gear this spring.
A lack of homes on the market has been a big reason prices have increased in Lawrence, local real estate agents have said. There was a positive sign on that front. Lawrence added 115 new listings in January compared with adding 91 in January 2019.
Another figure to watch on that front is the number of new building permits the city issues for single family homes. Those numbers are out for January, and they were pretty stagnant. The city issued permits for 10 single family homes in January. That’s the same number they issued in January 2019.
Generally, you would think new home construction would be surging in a market that is seeing home prices increase because of a lack of supply. But that hasn’t happened in Lawrence for a variety of reasons. It will be interesting to see if that changes in 2020. Thus far, no, but the home building season doesn’t really get going until the spring.