Sales tax revenues increase in South Lake Tahoe and El Dorado County

SOUTH LAKE TAHOE, Calif. - The winter of 2019 was a good one for both South Lake Tahoe and El Dorado County retailers, ski resorts, restaurants and others whose businesses collect sales tax, including online retailers selling goods in the area.

The first sales tax report for 2019 has been released, with $2,580,475 in gross receipts in South Lake Tahoe during Q4/Q1 and $11,976,387 in the unincorporated areas of El Dorado County. During the same two-quarter period the year before, tax revenues were $2,390,631 and $9,925,645 respectively.

Increases look like they were significant but there were errors in reporting caused by the California Department of Tax and Fee Administration software and how the user reports. Instead of a 21.3 percent increase for the county, Auditor-Controller Joe Harn says it is more like 9.6 percent in actual sales.

“Although the reported increases are significant, the County has a lot of work to do in creating an environment that fosters more retail shopping opportunities locally. El Dorado County per capita sales are significantly lower than unincorporated Placer or Sacramento counties," said Harn.

The City of South Lake Tahoe uses the same data from reports generated from the State software. Their receipts showed a 9.3 percent increase from the same period in 2018, but actual sales were up 2.7 percent. The voter-approved Measure Q shows $1,388,423 in revenue for Q4/Q1 with $647,821 coming from the first quarter of 2019 alone in South Lake Tahoe. Measure Q was the voter-approved sales tax increase of one-half cent in 2004.

In South Lake Tahoe, casual dining is the largest sales tax generator followed by online sales, general consumer goods, food and drugs, and fuel/service stations. In the County the order is different, with online sales the leader, followed by fuel and service stations and consumer goods. The County unincorporated areas saw a decline in casual dining and quick-serve restaurant sales.

Sales tax per capita in South Lake Tahoe has been higher than that of the State of California and EL Dorado County each of the last four years for Quarter 1. These figures don't mean local residents spend more, it is due to the tourist economy.

The attached graph shows a decrease in SLT in the food and drug category but that is mainly due to some reclassification of current businesses. Kmart filing for bankruptcy ad changing to a new business license holder may have affected that along with gas stations that sell food and supplies.

Even with all of the software issues creating the aberrations, county-wide sales were up 6.1 percent over the previous year. In comparison, the Sacramento region was up 4.3 percent.

The top 25 producers of sales tax in South Lake Tahoe in the first quarter were (in random order): Aisle 1, McDonald's, Azul Latin Kitchen, McP's Pub Tahoe, Base Camp Pizza Co, Meeks Building Center, Brewery At Lake Tahoe, Powder House, Raley's, California Burger, Riva Grill on the Lake, CVS Pharmacy, Fire Ice Grill & Bar, Ross, Grocery Outlet, Safeway, Heavenly Sports, Safeway Fuel, Jim Bagan Toyota, Sports Ltd, KB Chevron, TJ Maxx, Kmart, Up Shirt Creek, Lake Tahoe Shell.

In the unincorporated areas of the county, excluding Placerville and South Lake Tahoe, the top 25 producers of sales tax were (in random order): Sierra-at-Tahoe, Heavenly Valley Cal Base Lodge, Target, Walmart, Kmart, Safeway, Safeway Fuel, American Plastic Lumber, Quik Stop, Cameron Park 76, Cameron Park Arco AM/PM, Chevron, Crystal View Station, CVS Pharmacy, Daimler Trust, Foothill Health & Wellness, Golden State Flow Measurement, Jeff Abel, Joe-Don, Lees Feed & Western Store, Mercedes Benz of El Dorado Hills, My Goods Market, Shingle Springs Honda, Shingle Springs Nissan Subaru.

Analysts from HdL Companies, the preparers of the County and City's reports, say the 10 years of positive economic growth in the state could be leveling off. Car sales and vehicle registrations are down, perhaps due to younger generations using Uber and Lyft instead of buying a car. They also say that rising restaurant menu prices, renewed competition from grocer prepared meals and cutbacks in foreign tourism appear to be reducing restaurant patronage in most areas, always one of the state's faster-growing segments.