State tax revenue down across the board, worst yet to come
SALT LAKE CITY, Utah — Utah leaders say COVID-19 restrictions are causing state tax revenue to plummet. The impact is wide-ranging and, perhaps most concerning, it’s far from over.
Tax revenue tumble
Some of the hardest hit areas include arts and entertainment, retail clothing and accommodations. All of those sectors are down more than 40%.
Also, not surprisingly, Utahpolicy.com notes that state per-gallon gas tax receipts are down. That revenue source alone is falling around 13%, while aviation fuel sales are down 26%. Airport officials said it’s simply because flights are also way down at the Salt Lake City International Airport. As of now, the plan is still to open parts of the new airport in September.
According to the most recent tax data, which is taken from March, many other areas are suffering:
- Oil, gas and mining, down 16%.
- Auto parts, down 20%.
- Home furnishings, down 11%.
- Health and personal care sales, down 9.9%.
- Sporting goods, down 7.2%.
- Food services and drinking (restaurants and bars), down 26%.
Meanwhile, a few areas are actually being impacted in a positive way. Non-store retail (internet) sales are up 76%.
The few outliers aren’t enough to make up for the massive losses, though. Overall, March’s sales tax take was down about a half percent from the same time one year ago. If tax officials are right, that figure will seem paltry compared to the next round of data, which will draw from April.
Another session on the horizon?
With so much uncertainty, it’s keeping the door open for another possible special legislative session.
State Senator Todd Weiler says most of their current financial circumstance was impossible to predict.
“For instance, we were expecting everyone to pay their state income tax on April 15. Well, President Trump bounced that to July 15,” he explains. “So all of that money we were expecting in April, got delayed to July.”
The fiscal 2021 budget starts July 1 and legislative leaders know it’ll be hit hard. Utah Policy reports it could be upwards of $2 billion, which is around 10% of next year’s budget.
However, for at least the time being, legislative leaders seem to be content waiting until the April tax receipts come in.
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