Category Archives: Sales Tax
The Tax Commission distributed $55.79 million to cities and counties for the 1% local sales tax in February 2015, a 13.0% increase over last February’s $49.38 million (Figure 1). These monies are primarily from sales in December 2014, but also include monies from fourth quarter and calendar year returns. The 13% gain in the February distribution pushes up the year-to-date gain for the first half of FY2014-15 to 7.1%.
In contrast, nationwide retailers’ sales rose 4.3% in December 2014 to $455.7 billion, according to the U.S. Bureau of the Census through FRB St. Louis (Figure 2).
Our models estimated a baseline forecast for CY2015 taxable sales at 6.8% growth (made last October). Our pessimistic scenario indicated 2.7% growth for CY2015.
Five out of the eight largest cities in Salt Lake County distributions rose in double-digits, including Salt Lake City (14.1%), West Valley (16.6%), Midvale (15%), Draper (24.2%) and South Jordan (17.5%). Draper’s distribution reached $1 million for the first time.
All of the large cities we survey in Utah and Weber counties’ distributions rose more than 12%. Lehi reached the million dollar mark too for the first time.
In Davis county, Layton’s distribution rose 12.2% and Farmington’s rose almost 21%.
Park City’s distribution rose almost 25%, suggesting sales rose nearly 37%.
Figure 1. Select 1% Sales Tax Distributions
Figure 2. U.S. Retail Sales (Federal Reserve Bank, St. Louis)
Figure 3. Utah 1% Sales Tax Distributions
Following four months of 2% to 4% growth, November and now December’s 1% sales tax distribution escalated to 7.4% and 8.2%, respectively. In December, the Tax Commission distributed $39.88 million compared to $36.9 million in 2013. December’s 8.2% growth, representing sales from October, brings year-to-date growth for Utah’s cities up to 6.1% during the first four months of fiscal year 2014-15.
In the U.S. sales from retailers rose 4.3% in November. Utah’s improving performance may be pushed by improving jobs and in some sectors better wage growth. It also may be attributed to the poor performance in 2013 as the federal government began to cut back on new contracts and laying off workers. In addition, copper mining has returned to pre-landslide production levels. In north Utah county, software companies are clearly expanding investment and commercial construction. This is partially reflected in Lehi’s computed sales increase of 20.7% for October.
Have a Happy New Year – this should last for a few more months,
Cities and towns in Utah receive a 1% sales tax that is distributed by the state using a formula based 50% on population and 50% on point-of-sale. The Governor’s Office of Management and Budget puts forth population estimates each year that affect the distribution of of this tax, and ULCT economist Doug Macdonald has put together his estimate on how each municipality will be affected by changes in population in both PDF and EXCEL formats. Contact Doug at firstname.lastname@example.org with any questions.
The September distribution came out a few weeks ago showing that the 1% local sales tax grew 4.4% from a year earlier at $40.35 million. The growth rate for the last three months is up 3.3%. Prospects for 4% growth should continue for the rest of the calendar year despite a recent downturn in new home building. Employment growth between 3% and 4% appears imminent and the average wage is gaining ground. Across the U.S., retail sales made a solid 5% gain in August.
Salt Lake City, the largest city in the state, recorded a 3.8% gain in the September distribution, representing sales mostly in July. Similarly, Murray and West Jordan saw 3% gains. The distributions in Draper and South Jordan of near 11% suggest that their direct sales may have increased 18.5% and 16.9%, respectively.
Ogden’s and Provo’s distribution were up 6.2% and 5.7%, respectively. Meanwhile the near 12% gain in Lehi reflects the fact that direct sales must have increased almost 19%.
Excepting Farmington where the distribution increased 15%, distributions across Davis County increased from 2.5% (Bountiful) to 5.5% (Clearfield).
Park City’s distribution increased 17% and St. George’s increased 5.1% in September.
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.