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Category Archives: Sales Tax

DOUG MACDONALD

May’s distribution came out today at $45.62 million, up 3.0% from last year’s $44.31 million (Table 1).  This distribution represents monthly returns from March sales and first quarterly sales in 2013.  It follows a 4.0% gain in February and a 15.3% jump in January sales.  For the first quarter of 2013, the statewide growth ran 6.9% ahead of last year.

Table 1

Table 1

Nationwide, March retail sales and food services posted a 1.5% gain over the prior year.
Another important milestone occurred when we seasonally adjust the May distribution to $42.24 million, it is only 0.5% lower than the peak distribution of May 2007 at $42.44 million (Chart 1).

Chart 1

Chart 1

Two major cities saw gains of more than 10% in May — Sandy at 10.5% and St. George at 11.7% (Chart 2).  Both of these cities’ fiscal year-to-date growth rate are close to 10%.  Sandy’s growth may be partially due to the large sporting goods store opening this year.  St. George’s may be due to a hot construction market and a resumption of fast-desert, long-term growth.

Chart 2

Chart 2

Three other cities demonstrated better than average growth: West Valley (up 6.6%), West Jordan (up 5.6%), and Tooele (up (6.8%).

Salt Lake City’s growth rate all but stalled for March sales, but its 6.5% year-to-date growth indicates strength from its City Creek and other recent developments.

Soft growth, between 0 and 4% was the rule in cities in Utah, Davis and Weber counties.  Park City’s distribution took a serious dip, down 15.4%.

If trends continue, expect the first month of the new quarter, June’s distribution for April sales to pick up.

April 2013 DistributionDOUG MACDONALD

April’s 1% local sales tax brought in a total of $34.66 million statewide, up 4% over the same period last year.  April’s distribution represents February 2013 sales.  Following a 15% month (January sales)  the 4% growth for  February sales may not be surprising.

A better metric would be to look at the last 3 month’s growth rate, which is up 7.3% for the statewide local sales tax.  Fiscal year-to-date growth of 6.6% right on with our forecast of CY2013.

Draper’s 14.1% growth led the other major cities we track.  South Jordan’s 11% increase placed second.  Salt Lake City’s distribution increased 4.8%, slightly ahead of the State’s 4% growth.

Bountiful and Layton, had increases similar to Salt Lake City.

Farmington’s distribution increased nearly 9.6% (Station Park mall), very close to Lehi’s 10% (commercial & retail growth) and St. George’s 10.3% (housing rebound) growth rate.

DOUG MACDONALD
Feb Distribution 13The Tax Commission released its distributions on Monday.  This is the largest distribution of the year, representing not only December sales, but also sales for fourth calendar quarter accounts and  small annual accounts.  The total distribution of the 1% local tax of $48.22 million was up 4.2% compared to a year earlier.  This was a better showing than earlier reports a week ago of a possible 2.5% decline.  Distributions are up 5.7% for the cities’ fiscal year.  This is slightly lower than the 6.6% forecast we made for CY2013 last November.

At $4.89 million, Salt Lake City, saw its distribution increase 8.2% for December sales.  This may have been partially due to the new City Creek development.  Sandy’s 13.3% gain may have been forged by the addition of the new Scheels store.  Similarly, Farmington’s 7.8% gain probably reflected new restaurants at Station Park.  Other cities where growth beat 6% were: Draper (6.8%), South Jordan (7.1%), Bountiful (8.1%) and St. George (6.6%).

Given the hits to consumer confidence in December as the federal government came dealt with its “fiscal cliff”, it is probably no wonder that cities with large stakes in auto sales like Orem and Murray saw low growth in December.

DOUG MACDONALD

December 2012 1%Statewide the 1% local sales tax was up 9.6% for December at $35.38 million.  Most major cities fared well except for Sandy and Murray.  Salt Lake City’s distribution was up 9.2% at $3.66 million, very close to the statewide growth.  Draper, South Jordan, Provo, Bountiful, and Layton had distribution growth ranging from 10.7% to 14.3%.

Boosting taxable sales growth is the resurgence in residential construction, where new permit values were up 39% statewide and 121% in Salt Lake County for the month of October. Construction growth tends to drive taxable sales from two to four quarters out into the future, based on our econometric models.

November 1%DOUG MACDONALD

Distributions for the 1% local sales tax for November (September sales) were up 4.6% at $42.4 million over last year’s $40.5 million.  This followed a nearly 13% increase in last month’s distribution, so hang on to your hat.  For the first three months of FY2013 distributions were up a healthy 7.2%.  This is a bit shy of our FY2013 forecast of 7.8% made last December.

Several large cities fared pretty well in the November distribution.  Salt Lake City saw its distribution rise 6.4% to $4.25 million.  Sandy’s sales in September rose 14%, possibly due to a new, large retailer.  Draper’s sales rose 10.2%.  South Jordan’s -7% distribution suggests some technical problems with a few accounts (Draper’s October distribution was up 27%).

Sales in Park City and St. George ebbed a bit in September, both at about 7%, but still stronger than the state average.

Sales in Utah and Davis counties were mixed.  Farmington’s sales appear to have peaked as Station Park expansion slowed down temporarily.  Lehi sales rose almost 13% due to lots of construction activity in northern Utah county.

 

DOUG MACDONALD – October 1% local sales tax distributions beat expectations by increasing 12.7% over the same period last year.  The total local sales tax distributions of $40.56 million by the Tax Commission in October, representing sales for August in Utah were almost $5 million higher than the $36 million distributed last year at the same time

Chart from the New York Times

Double-digit sales were common in Salt Lake County cities.  Salt Lake’s distribution of $4.18 million was up 13.5% and West Valley’s distribution was up 12.6%.  Murray’s distribution was up 16.5%, suggesting auto and light truck sales did well in August.  Higher auto sales were evident in September across the nation (see charts from the New York Times), suggesting next months distribution will also do well.  September 2012 auto sales grew almost 15% in the U.S., the highest in four years.

Tourist-heavy cities ilk St. George (+15.6%) and Park City (+19.7%) also fared well in August.

For the first two months of the cities’ fiscal year 2013, local tax distributions were up 8.7%, slightly ahead of our December forecast of 7.9%.

Doug Macdonald
Economic Policy Analyst
801 550-3161
DOUGMACDONALD@MAC.COM

DOUG MACDONALD

September’s distribution the 1% local sales tax came out earlier this week, and July turned out a slower growth month than the prior two months.  Statewide the 1% took in $32.7 million for July sales, putting September distributions, up 4.2%.

Reports out today indicated that August sales nationwide rose 0.5% above July, pretty good, but much of the increase was due to increases of gasoline prices.

Also, nationally, both consumer confidence indices rose significantly suggesting increased spending over the next two months.  See chart below from Moody’s Economy.com.

This was the first fiscal month of fiscal year 2013.  For fiscal year 2012 growth was a respectable 8.0%.  (We predicted 7.9% last December and 6.8% way back in December 2010).

Slower growth for one month does not necessarily mark a trend since we have tended to have one month in three be near zero over the past year.  So if our slowest month is 4% that would be good.  This is most likely due to Tax Commission cut offs and processing.

Doug Macdonald
Economic Policy Analyst
801 550-3161
dougmacdonald@mac.com

DOUG MACDONALD

May sales and July’s distribution of the 1% local sales tax proved to be quite strong, rising 10.9% statewide to $35.8 million.  For 11 months of fiscal year 2012 distributions are up 8.0% with one month to go.  We do not expect these growth rates to continue at this pace given the flood of negative recent national economic news.  Although we have to admit that Utah’s employment prospects thus far have shifted into third gear recently to more than 3% growth.

A host of cities saw their distributions rise more than 15% in July.  The largest city in the state, Salt Lake City, received a 17.5% increase at $3.7 million.  Its fiscal year to date gain is standing at 9.6%. Notable increases were seen in Sandy (26%), Lehi (18%) and Provo (16%).

The Tax Commission instituted new 2011 population numbers to calculate the 50/50 formula in July’s distribution.  Statewide the 2011 population rose to 2,817,222 from 2,763,885 in 2010, for an increase of 53,337 people (1.9%).  We will attempt to calculate the future % impact on each city due to the new population numbers as soon as possible.

Doug Macdonald
Economic Policy Analyst
801 550-3161
DOUGMACDONALD@MAC.COM

June’s distribution came out last week and was up 1.5% compared to last year.  Even though this appears to be slower growth, it looks like it fits a pattern of slow growth in the first month of a quarter, followed by average growth in the second, and double-digit growth in the third month of the quarter.

For the first 10 months of the fiscal year the statewide 1% is up 7.7%, a bit higher than our December 2011 forecast of 6.4% and much higher than our pessimistic estimate of 2.4% (which assumed a European disorganized default, double-dipping the U.S. into recession).

Several of the major cities we track had significant decreases and one had a huge gain in June.  Park City and Murray were down almost 50%, while South Jordan jumped 102%.  We think these changes had something to do the truing-up adjustments in the hold-harmless formula, but have not confirmed that.

In sum, a great year for most cities !!!

If you have further questions, please feel free to give me a call,

Doug Macdonald
Economic Policy Analyst
801 550-3161
dougmacdonald@mac.com

DOUG MACDONALD

May distribution came out and apparently March sales were up substantially from last year: 15.5%.  The first quarter was up 8.4%, very good especially after the 0.5% increase in January sales. (We are getting a bit of a quarterly pattern of a very small 1st month, followed by better 2nd month and a very big 3rd month.)

In fact, fiscal year to date (9 months now in the bank) is now also up 8.4%.   This is better than our forecast for FY2012 of 7.9% presented in St. George.

We’ll keep you posted.  No data from the U’s BEBR on first quarter housing starts, so don’t know if housing contributed yet.  But wages and salaries are looking like 6% growth this year.

1% Local Option Sales Tax Distributions May 2012

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