The Tax Commission sent out the July distribution a bit early on the 18th while I was on vacation. The July distribution (representing May sales) of the 1% local sales tax was up 2.4% statewide at $38.85 million. Over the past three months the distributions have been up 4.8% over the prior year. Fiscal year-to-date the local sales tax is up 4.1% and has improved from 3.8% in April; this is getting closer to our December 2013 forecast of 4.5% (CLICK HERE)
In May, U.S. retail sales were up 4.2%, led by an 8.4% increase in light car and truck unit sales. The CPI was up 2.1%, edging up from 1.5% levels three months ago. The leading indicators for May were up 5.9%, suggesting continued expansion for the next six months.
Salt Lake City, the largest city in the state, saw its distribution up only 0.3. This suggests that its direct sales were down 1.8% in May. Sales in other major cities in Salt Lake County fared better: West Valley’s distribution was up 5.3%, Sandy, Murray and West Jordan’s were up close to 3% in July. Draper’s 17.3% percent gain implies they had a 32% sales increase in May.
In Utah County, Lehi’s distribution was up 5.8%, suggesting a sales increase of 9.2%. Orem’s distribution was up 4.3%, while Provo’s was off 2.2%, indicating a near 7% drop in sales.
Farmington once again led Davis County cities with a 12.7% distribution increase. Centerville and Layton, fared well with 6.8% and 5.4% respective gains.
St. George’s 6.1% distribution increase implied a near 10% increase in direct sales.
The 1% local sales tax distribution of $38.32 million in June 2014, representing mostly April sales grew 9.8% compared to a year earlier. Sales and purchases growth rates have been improving since the March distribution, when they only rose 0.8% for the prior three months. Nationwide, retail and food service sales rose 4.6% in April and 4.3% in May. U.S. consumer sentiment edged back to 81.2 in June after scoring 84.1 in April.
The largest city in the State, Salt Lake City, saw its distribution rise 10.3% in June. Other than South Jordan, most of the other larger cities in Salt Lake County saw impressive gains: Sandy (up 16.4%), West Valley (up 13.5%), Murray (up 14.7%), West Jordan (12.8%). Draper’s distribution was up 18.6%, suggesting a 27.4% increase.
In Utah County, Provo and Lehi recorded 16% increases, while Orem’s distribution was up 12.4%. Similar gains were made in Davis and Weber counties. Ogden’s distribution (up 11.8%) suggest sales were up 13.8%. Farmington’s distribution increase of 22.7% means sales were up almost 36%, due to continued increases at Station Park.
Off the Wasatch Front, St. George’s distribution increase of 17.3% suggests a sales increase of 24.9%.
A word of caution though: these large gains may mean the Tax Commission’s distribution includes significant advance payments for May or included larger than usual amounts of late payments in the June distribution. Still, it is good to have a double-digit gain following anemic in four out of the last five distributions.
May’s distribution of the 1% local sales at $46.92 million was up 2.8% compared to a year earlier (Figure 1 and 2). This distribution represents mainly monthly sales for March sales and first quarter sales for smaller quarterly accounts. The 2.8% rate is 1.7% lower than our 4.5% forecast for fiscal year 2014 made last December. Fiscal year-to-date revenues statewide were up 3.7% through the first nine months of fiscal year 2014.
On a seasonally adjusted basis May’s 1% sales taxes were up 3.8% over April’s at $43.44 million (Figure 3). This amount is almost $1 million greater than the peak of $42.44 million in May 2007.
Statewide, the April distribution for the 1% local sales tax was up 4.6% at $36.26 million (representing sales from February). The 4.6% gain was preceded by three months of anemic 0.2%, -1.1% and 0.1% changes. The 4.6% gain is close to our 4.5% forecast for the entire fiscal year 2014.
The state’s largest city, Salt Lake, registered a 2.5% decline in the April distribution. Sandy City gained only 1.3% and Draper was up only 1%. Meanwhile, distributions in the central and southwest Salt Lake Valley fared better: (Midvale, up 23.7%; South Jordan, up 13%; West Jordan, up 9.9%; and Murray, up 5.6%). West Valley’s distribution was up 7% in April.
Similarly, distributions in Ogden and Roy were up 6.5% and 7.3%, respectively. Provo’s was up 5.4% and Lehi’s was up 8.2%.
Distributions in South Davis County were soft like Salt Lake City’s (Bountiful, up 2.7%, Centerville, 0%). Farmington continued its 20% gains.
What was the cause, then, of the weakness over the past four months? New data (Department of Workforce Services) for the 4th quarter of 2013 revealed that average wages and salaries fell 1.1%, partially due to declines in the Mining and Federal Government (temporary shutdown) sectors. Residential construction new permit values were also down (-3%) in the 4th quarter along the Wasatch Front. In addition, statewide business investment was soft in the 4th quarter, particularly in Mining (-28%) and Wholesale Durable Goods (-5%), probably due to comparisons before the Rio Tinto landslide. Sales to information businesses sank 16% too in the 4th quarter.
We’re hoping we are back on track now following 4th quarter’s federal government scare and severe winter weather in other parts of the country, which also may have influenced Utah consumer confidence in November, December and January.