Category Archives: Sales Tax
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.
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
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%.
Economic Policy Analyst
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.
Economic Policy Analyst
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.
Economic Policy Analyst
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,
Economic Policy Analyst
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.
This month’s statewide 1% local distribution of $33.3 million came out yesterday and was up 7.7% percent compared to last year. This was very close to the 8-month fiscal year-to-date rate of 7.3%, which is very close to our upper-end forecast.
The 3-month averages dropped quite a bit because the big 20.2% gain in the January distribution fell out.
Notably, Lehi, Bountiful, Murray, Provo, Park City and St. George distributions saw double-digits growth. Extra growth probably stems from car and truck sales and construction activity.
For all the April numbers for SLC, Sandy, West Valley, Murray, Draper, South Jordan, West Jordan, Ogden, Provo, Orem, Lehi, Bountiful, Clearfield, Layton, Park City, and St. George, Click Here.
New car and truck sales rose almost 16% in February 2012 compared to the same month a year ago.[i] Auto sales were up almost 24% as consumers snapped up fuel-efficient models due to higher gasoline prices. Truck sales, up nearly 8%, were pulled up by Ford’s F-series trucks, which shot up 26%. Ford F-series were also the most popular make by volume, selling 47,273. Next highest were Toyota’s Camry, which sold 34,542. Other most popular makes with high growth rates in February were:
1) Ford Focus, up 115%,
2) Nissan Altima, up 58%,
3) Toyota Prius, up 52%,
4) Honda Civic, up 42%,
5) Toyota Camry, up 27%.
Among automakers, Chrysler sold 40% more autos in February 2012 than in 2011 at 133,521. The largest seller, General Motors, sold 209,306 autos, but up only 1% from last year. Foreign makes like Kia, Volkswagen and BMW registered more than 30% gains.
Analysts were generally optimistic about 2012’s continued strong auto sales. “We don’t see any major risks to industry sales going below 14 million this year (up 12%),” said Jesse Toprak from TrueCar.com, which tracks sales and pricing.[ii] U.S. car and truck sales troughed at 10.4 million sales in 2009 and then rose to 12.5 million sales by last year.[iii] Automakers are also happy to get higher profits by giving away fewer incentives and all this despite higher gasoline prices.
[i] “Auto Sales Pick Up Pace Despite Gas Prices”, Nick Bunkley, New York Times, March 2, 2012.
As expected, following the 15.9% increase last month, the December 1% sales tax distributed to local governments fell by 1.7%. Remember, the December distribution represents mainly October sales.
On a fiscal year-to-date basis (September through December) the 1% tax is up 5.5%, indicating an economy that is turning around. Our latest “baseline” forecast is looking for 7.9% growth in FY2012, with a “pessimistic” estimate of 2.4% (if there is a European recession).
The largest city in the state, Salt Lake City, saw its distribution fall 0.4%, not as far down as the statewide average. Murray’s distribution was up 9.3%, perhaps due to continued rebounding in auto and truck sales.