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Federal stimulus, construction, online sales drive record Phoenix tax revenue

Despite the pandemic pummeling the hotel industry, Phoenix is reporting record sales tax collections. 

For the 2020-221 fiscal year, Phoenix collected almost 40% less tax revenue from hotels and 10% less from restaurants and bars compared to pre-COVID-19. However, those losses were mostly offset by higher sales tax collection through construction and retail, including online sales. 

“We have seen positive growth throughout COVID-19. We believe that’s primarily due to shifts in consumer spending to taxable goods away from services that are not taxed, as well as just overall growth in the Phoenix economy,” said Amber Williamson, Phoenix budget and research director.

On Wednesday, she told a city subcommittee federal stimulus checks sent to households played a big role, “Information we received from the state’s finance advisory committee indicated that $60 billion was infused into the state and local economy and it did what it  was intended to do: to prevent a severe economic decline for the state and the city.”

As federal aid diminishes, Williamson expects retail sales will slow but says Phoenix should continue to see positive growth. 

As a senior field correspondent, Christina Estes focuses on stories that impact our economy, your wallet and public policy.