Bed-and-Breakfast Tax Growth in Aberdeen Coincides with Autumn Coronavirus Surge

Aberdeen continues to report surprisingly good sales tax numbers… but amid the bed-and-breakfast tax numbers lies an ugly correlation to the coronavirus pandemic:

Aberdeen’s increase continues a 2020 trend of unusually high sales tax collections. The numbers not only reflect the city’s standard 2% sales tax, but also the 1% tax charged on hotel and motel stays, restaurant meals and alcohol sales.

The revenue from that 1% tax goes into the city’s promotion fund and provides money for various organizations, including the Aberdeen Area Chamber of Commerce, the Aberdeen Area Convention and Visitors Bureau and the Aberdeen Downtown Association. While overall tax revenues were up last year, with fewer events, the city’s 1% tax revenues dropped. However, they did recover some compared to early in 2020.

The October and November sales tax reports both showed an increase in receipts for that 1% tax. The December report showed about a 2.43% decrease. For all of 2020, receipts for that 1% tax were about 7.7% lower than in 2019 [Elisa Sand, “December Sales Tax Collections 10% Above 2019 as Trend Continues {paywall},” Aberdeen American News, 2021.01.24].

Reports from each month reflect sales in the previous month. So increases in October and November reports reflect increases in collections in September and October. Aberdeen’s restaurants, bars, and lodging establishments did more business than the previous year in the two months when the coronavirus pandemic made its worst surge in South Dakota. That nonessential eating, drinking, and sleeping around tapered off only slightly in November, as if just a few people looked around at all the old folks dying and workers having to stay home sick and thought, “Gee, maybe going to the bar isn’t the smartest thing to do right now.”

I have not eaten in a restaurant since March. Luckily for Aberdeen’s city coffers, most of my neighbors have chosen to negate my anti-pandemic efforts.