Page 139 - CityofColleyvilleFY23AdoptedBudget

Sales and Hotel Taxes Summary

Sales tax is the second largest operational revenue source in the City, and it spans four separate funds:
The General Fund receives one penny levied on each non-exempt retail transaction sourced inside the City
($5.175m in FY22)
The Crime Control and Prevention District Fund receives one-half penny levied on each non-exempt retail
transaction sourced inside the City ($2.5m in FY22)
The Economic Development District Fund receives one-half penny levied on each non-exempt retail transaction
sourced inside the City ($2.5m in FY22)
The Hotel Tax Fund receives 7% of all lodging transactions inside the City ($200,000 in FY22)
. The City’s primary commercial corridor is located on Colleyville Boulevard (SH26), which has recently completed its
construction (expanding from four-to-six lanes with medians) and beauti cation efforts. Colleyville's biggest retail sales
tax earners tend to be large grocers and liquor stores. As those businesses carry items many shoppers consider to be
essential, their sales tend to uctuate much less than other economic sectors. However, about 11%, or $1.3 million worth
of tax does come from our restaurant/bar industry, which is much more susceptible to economic pressures such as a
recessions or, in the case of 2020-2021, government shutdowns. COVID-related closures did have an impact on this
industry, but sales tax as a whole did not decrease. Rather, Colleyville saw 36% growth in this revenue from 2020
through 2022. This amounts to an extra $2.7 million in resources to fund the City’s operations. In fact, FY22 was the rst
year the City’s sales tax came in over $10 million. For the purposes of budgeting conservatively, however, staff balanced
the FY23 budget with a more modest outlook.

With travel restrictions in place in FY20 and FY21, hotel taxes obviously saw a much greater impact than overall retail
sales tax. Previously collecting around $250,000 annually, this revenue stream decreased to around $115,000 during the
pandemic years, requiring the Hotel Fund to rely on its accumulated balance to maintain its operations. Thankfully,
FY22 brought a resurgence in this revenue stream and staff fully anticipates tax receipts to return to normal levels in
FY23.

A9,982,000 $9,982,000
(100.00% vs. prior year)

Sales and Hotel Taxes Proposed and Historical Budget vs. Actual
$12.5M

$10M

$7.5M

$5M

$2.5M

$0
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
Actual Budgeted Over Budget

While sales taxes experienced year-over-year increases since FY19, hotel taxes signi cantly decreased during this time due to
pandemic-related travel restrictions. The result is that total sales/hotel taxes looks as if it decreased from FY20 to FY21.

City of Colleyville | Budget Book 2023 Page 139