Sales Tax Distribution slows to 0.4% growth

July 1, 2013 Sales Tax Distribution slows to 0.4% growth

The 1% local sales tax rose only 0.4% in June to $34.9 million for April sales, lower than our expectations.  However, for the 19 cities we track, 16 of them did better than the average statewide growth.

Salt Lake City, the largest city in the state, made a 2.9% gain in the June distribution.  South Jordan, Draper and Sandy saw their sales increase in double-digits (32.5%, 14.6%, and 10.7%, respectively).  West Valley’s sales rose only 1.8%.  Curiously, Murray’s distribution dropped 31.2%.

Two factors in the process may have impacted this month’s distribution for an individual city.  First, the distribution came out last Friday (June 21), perhaps a bit early.  Second, the hold-harmless provisions impacted this month’s distribution by adding approximately $2.5 million to South Salt Lake’s distribution, $485,000 to Riverdale, $57,000 to Alta and $36,000 to Brian Head.  These credits had to come from other cities. The adjustments are made in June for the entire fiscal year to minimize the impact for the other months.  The sum of these credits, $3.1 million, is about 9% of June’s distribution, but is less than 1% per month over the entire year.

On a county-by-county basis, Salt Lake County’s sales rose 0.5%, Davis County’s rose 1.8%, Utah County’s rose 2.7%, Weber’s 1.2% and Washington’s rose by 4.8%.

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