July 2, 2015 Local Option Sales Tax Distribution Up Nearly 9%
The June distribution for the 1% local sales tax indicated that April taxable sales increased 8.6% compared to a year earlier. The Tax Commission distributed $41.61 million for June’s 1% local sales tax compared to $38.32 million last June.
This distribution surprised us on the upside, because lately the growth in the two distributions after the big, quarter-end distribution (e.g., February and May) has been muted. But June is the distribution month when the Tax Commission “trues-up” the hold-harmless cities to last-year’s distribution. This June they added about $1.98 million, compared to $2.71 million last year. This effectively bumped up the distributions to non-hold-harmless cities by about $720,000 (or 2%). This may have bumped up non-hold-harmless cities, but probably didn’t effect the overall 8.6% gain. So, it is possible that extraordinary inclusions of May transactions bolstered the June distribution; this would cut into next month’s distribution.
Nationwide, real retail and food services sales increased 1.6% in April and 2.6% in May 2015.
In Utah, the 8.6% gain for June’s distribution brought up the 3-month average gain from 2% last month to 4.3%. Fiscal year 2015 year-to-date growth statewide is now up to 5.7% (from 5.4% last month) based on the first 10 months.
In Salt Lake County, double-digit gains occurred in six of the nine cities we tally. Holladay’s distribution rose 23.3% and Draper’s distribution was up 20.4% compared to a year earlier. Salt Lake City’s distribution of $3.99 million was up 14.4%, bringing their year-to-date gain up to 6.3%. The loss of several auto dealers to other cities flattened Sandy’s distribution.
In other counties, double-digit gains were the rule, either indicating very strong sales or the effect from the lower “true-up” to hold-harmless cities this year.