Tahoe City sales taxes surpass ski resorts

Recent economic data paints a picture that defies the commonly held notion that Tahoe City’s economy is slumping.

According to figures released by Placer County for annual sales tax revenues from 1991 to 2006, Tahoe City’s retail sector surpassed that of any nearby Placer County community, including Squaw Valley and Northstar.

Over the past decade, Tahoe City consistently grossed a half-million dollars more in sales tax than other North Shore and Tahoe-area communities.

In 1991, the town took in almost four times as much retail revenue as Squaw Valley and Alpine Meadows combined, which has taken in the second highest amount of sales tax. And in 2006 — despite a well-established Village at Squaw Valley — Tahoe City’s figures were double those generated in Olympic Valley and Alpine Meadows.

“I think it’s the mix of retail sales opportunities that Tahoe City has, and that are just traditional to Tahoe City and somewhat limited in other areas,” said Executive Director Steve Teshara of the North Lake Tahoe Resort Association.

After a first glance at the voluminous data, Teshara said Tahoe City’s two grocery stores, gas stations and indoor shopping mall help sustain the town’s economic vitality.

Placer County annually compiles sales tax data gathered from the state to look at regional trends, said Jennifer Merchant of the county’s Executive Office. The county charges sales tax on 7.25 percent of a retail transaction, and the amount collected is a direct indicator of business health.

This year, however, was the first time the county organized the data by community, Merchant said.

“Really, I think it’s looking within each area and finding out what functions are working and which ones aren’t working as well,” she said in a phone interview.

Placer County released the report last week to various local agencies. Officials from both the resort association and the Tahoe City Downtown Association said their respective boards will take a closer look at the information in the near future.

Sales tax trends

The chart shows a healthy, upward trend for every community on the North Shore during the 1990s. But a notably steep decline in 2002 points to the negative economic impacts the September 11, 2001, terrorist attacks had on the region’s visitor-serving industry.

The area’s economy, however, has since rebounded with current figures surpassing amounts achieved prior to 2001.

Sales tax receipts began to spike in 2002 in Squaw Valley and Alpine Meadows, and have continued climbing. The 67 percent increase from 2002 to 2006 directly corresponds to the completion and establishment of the Village at Squaw Valley.

Northstar’s data also reveals the economic impacts of their recently completed village — a 39 percent jump in tax revenues from 2005 to 2006.

What some say is most interesting, however, is that Tahoe City’s corresponding data has also spiked — although Squaw Valley is gradually closing the gap.

Despite the development of nearby ski resorts, Tahoe City’s sales tax revenue has increased by 14 percent since 2003.

“[The data] doesn’t show that we’ve had that much of an impact,” said President Liz Dugan of the Squaw Valley Business Association. “Every once in a while you hear people complaining that Squaw takes away the business in Tahoe City. But this doesn’t show that at all ... it is showing that together, as a community, we are all — we’re moving forward, which is awesome.”

Teshara said if Tahoe City’s tax receipts were declining, he’d have more to be concerned about.

“But it’s trending upward rather significantly,” Teshara said. “[Tahoe City] is roughly on an upwards track towards a million dollars in sales tax revenue.”

Both Kings Beach and the West Shore consistently grossed more sales tax than Northstar since 1991. But they remain far behind Tahoe City’s retail sales. The West Shore’s sales tax revenues exceeded Kings Beach’s by $31,773 in 2006.

“I think [the data] shows that Tahoe City is a little ahead of the Kings Beach area, which is not necessarily a surprise,” Teshara said. “But that’s why there’s a lot of effort to upgrade in Kings Beach... to try to give new life and bring new economic vitality to the Kings Beach area.”

Tahoe’s sales tax revenue, at a glance • Of the 7.25 percent sales tax rate, 5.25 percent goes directly to the state and 2 percent to local jurisdictions. Town or county jurisdictions can add as much as another 1 percent to the base rate to fund local services. • During the 2006 winter season, Tahoe City’s sales tax revenues accounted for 31 percent of the quarter’s total, while Squaw Valley provided 26 percent and Northstar contributed 19 percent. • In 2006, Tahoe City grossed nearly four times as much sales tax as Kings Beach — $968,178 compared to $254,998.