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Tax revenue increase driven by construction, vehicles

August 17, 2018

Workers build new homes in July at the Twin Brooks development in Mount Vernon.

Construction projects and more motor vehicle purchases contributed to an about 9 percent increase in taxable retail sales in Skagit County for the first fiscal quarter of 2018, according to a Department of Revenue news release.

From January to March, sales were 8.8 percent greater than the first quarter of 2017, according to department data.

Construction sales rose $32 million, from $80 million to $112 million.

James McCafferty, co-director of the Center for Economic and Business Research at Western Washington University, said a few big construction projects are enough to cause a large increase in taxable retail sales in low-density counties such as Skagit.

“If you start with a smaller base, it doesn’t take as much of a dollar amount to make a percent change,” McCafferty said.

The construction of hotels and multifamily housing buildings could impact the percentage, he said.

Brad Johnson, senior planner for Burlington, said the city has a few such projects, including two hotels, an apartment complex and a 40,000-square-foot manufacturing building.

Sales of motor vehicles and parts rose about $10 million from $140 million to $150 million.

This industry has long been a mainstay of Skagit County revenue, said John Sternlicht, CEO of the Economic Development Alliance of Skagit County.

“We are fortunate because we sell a few of those big ticket items so we make a lot of money off cars, RVs and boats new and used,” he said. “Those are big money makers so they generate a lot of tax revenue.”

Lower taxes than neighboring counties and a concentration of dealers make Skagit County a good place to buy a car, said Hart Hodges, co-director at the center.

Accommodations and food service also continue to be money-makers for Skagit County, bringing in $59 million in the first quarter of 2018 — up $4 million from the first quarter of 2017.

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