Category Archives: Sales Tax
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.
May’s distribution of the 1% local sales at $46.92 million was up 2.8% compared to a year earlier (Figure 1 and 2). This distribution represents mainly monthly sales for March sales and first quarter sales for smaller quarterly accounts. The 2.8% rate is 1.7% lower than our 4.5% forecast for fiscal year 2014 made last December. Fiscal year-to-date revenues statewide were up 3.7% through the first nine months of fiscal year 2014.
On a seasonally adjusted basis May’s 1% sales taxes were up 3.8% over April’s at $43.44 million (Figure 3). This amount is almost $1 million greater than the peak of $42.44 million in May 2007.
Statewide, the April distribution for the 1% local sales tax was up 4.6% at $36.26 million (representing sales from February). The 4.6% gain was preceded by three months of anemic 0.2%, -1.1% and 0.1% changes. The 4.6% gain is close to our 4.5% forecast for the entire fiscal year 2014.
The state’s largest city, Salt Lake, registered a 2.5% decline in the April distribution. Sandy City gained only 1.3% and Draper was up only 1%. Meanwhile, distributions in the central and southwest Salt Lake Valley fared better: (Midvale, up 23.7%; South Jordan, up 13%; West Jordan, up 9.9%; and Murray, up 5.6%). West Valley’s distribution was up 7% in April.
Similarly, distributions in Ogden and Roy were up 6.5% and 7.3%, respectively. Provo’s was up 5.4% and Lehi’s was up 8.2%.
Distributions in South Davis County were soft like Salt Lake City’s (Bountiful, up 2.7%, Centerville, 0%). Farmington continued its 20% gains.
What was the cause, then, of the weakness over the past four months? New data (Department of Workforce Services) for the 4th quarter of 2013 revealed that average wages and salaries fell 1.1%, partially due to declines in the Mining and Federal Government (temporary shutdown) sectors. Residential construction new permit values were also down (-3%) in the 4th quarter along the Wasatch Front. In addition, statewide business investment was soft in the 4th quarter, particularly in Mining (-28%) and Wholesale Durable Goods (-5%), probably due to comparisons before the Rio Tinto landslide. Sales to information businesses sank 16% too in the 4th quarter.
We’re hoping we are back on track now following 4th quarter’s federal government scare and severe winter weather in other parts of the country, which also may have influenced Utah consumer confidence in November, December and January.
Utah’s 1% local sales tax of $36.92 million in January 2014 (representing November 2013 sales) was 0.5% lower than the $37.11 million distributed a year earlier. For the the first five months of fiscal year 2015, local sales tax distributions are up 4.8%. But during the last three months the growth rate has slipped to 2.8%.
Utah’s economy may have slowed a bit more due to layoffs by the federal government due to the impending shutdown. Utah’s employment growth rate slipped from 3% in the summer months to 2.2% in November. Total construction values in 17 Wasatch Front & Back counties fell 3.5% between September and November compared to a year earlier. In Salt Lake County, residential construction rose almost 7%, while commercial construction fell 64%, driving a 24% total decline in new construction.
Salt Lake City’s distribution fell 0.7% in January. Sandy’s distribution fell 6.2%, suggesting an almost 12% decline in sales for November. On the plus side, Draper’s distribution rose 6.2% and Murray and Midvale’s rose 4.5%.
In Utah and Weber County, city distributions rose between 1% and 2% in January. Utah County’s distribution for its .25% tax inexplicably fell 7.4%.
In Davis County, distributions for Bountiful, Clearfield and Layton rose 5.8 to 5.9%. Farmington’s distribution rose almost 30%, implying a direct sales increase of 60.3%.
St. George’s distribution rose 3.4%, implying a 7.3% increase in November sales.
December’s distribution at $36.87 million, representing sales from October, was up 4.3% from a year earlier.
Salt Lake City’s sales were up 3.4%, below the statewide average. Other cities in Salt Lake County that did better than the statewide average were: Sandy (6.5%), Murray (5.2%), Midvale (8.8%), and Draper (10.1%).
This month we also calculated the “imputed” direct sales for the month, a number we computed going backwards with the 50% population / 50 % point-of-sale formula.
Based on this calculation direct sales growth were:
We thought October sales would have been soft given that consumer confidence in the U.S. slipped to 73.2 from 77.5 in September 2013. There was a foreboding edge in the air due to the government shutdown. Nevertheless, U.S. consumers increased their purchases of new automobiles and light trucks by 10.6% in October.
Since Washington DC came to terms with their budget in December, we are feeling quite a bit better about the February distribution for December sales.
The November distribution, which came out last week and represents taxable sales for September 2013, was up 4.5% compared to a year earlier. Statewide distribution totals were $44.31 million, up from $42.40 million in November 2012. For the first three months of fiscal year 2014, the statewide 1% local sales tax is up 6.1%, fairly close to our forecast of 6.5% (which assume no more major fiscal problems due to the federal debt ceiling and budget). The 6-month growth rate is almost 3% lower at 3.8%, suggesting that a realistic forecast still ranges between the low 2.4% pessimistic and 6.5% baseline scenarios.
Distributions among Utah’s major cities range between -3.6% (Tooele) and +15.3% (Farmington) in November. In Salt Lake County, South Jordan’s distribution was up 7.6%, in contrast with its 3-month growth rate of 1.4%. Draper’s distribution was up 5.1% in November and 12.4% for the first three months of fiscal year 2014. Salt Lake City’s distribution rose 4.6% and it’s year-to-date growth is up 6.1% from last year.
In Utah County, Orem led with a 6.6% gain, followed by Lehi at 4.8%. Fiscal year totals ranged from 7.0% to 7.9% for Provo, Orem and Lehi.
In Davis County, the two largest cities, Layton and Bountiful, saw respective increases of 5.8% and 5.4%.
St. George distribution was up 7.5%, partially due to its housing recovery.