State revenue loss due to COVID-19 not as bad as feared
Sunday, September 20, 2020
Most states wrapped up their 2020 fiscal year (FY) on June 30. As you might expect, those annual financial numbers were affected by the COVID-19 pandemic.
What is surprising, however, is that states' revenue situations weren't as bad as many had feared given the tax issues created by the coronavirus.
Fourth-quarter drag: Jared Walczak, Vice President of State Projects at the Tax Foundation, analyzed U.S. Census data and found that total state tax collections were about 5.5 percent ($59 billion) lower in FY 2020 than in FY 2019.
That 5.5 percent drop, which is this week's By the Numbers figure, is the total from all the usual state revenue sources.
The biggest, both in quarterly and annual comparisons, was in the corporate income tax category. That's not surprising since most businesses in many states were forced to close for the final three months of the fiscal year as a pandemic precaution.
Below is the full state tax collection breakout for FY19 and FY20:
|
Tax Type |
Year-over-Year |
Quarter-over-Quarter |
|
Individual Income Taxes |
-10.1% |
-38.7% |
|
Corporate Income Taxes |
-17.5% |
-50.9% |
|
General Sales Taxes |
-0.3% |
-17.3% |
|
State Property Taxes |
2.0% |
-2.5% |
|
Other Taxes |
-2.6% |
-18.8% |
|
Total Tax Collections |
-5.5% |
-29.0% |
|
Sources: U.S. Census Bureau; Tax Foundation calculations. |
||
Revision expected: Walczak notes that while income tax revenue dropped 10.1 percent year-over-year, this decrease is mainly due to delayed collections because of postponed filing deadlines, not an actual decline in receipts.
And once delayed income tax payments are accounted for and shifted to FY 2020, the decline in state tax revenue between FY 2019 and FY 2020 should drop from 5.5 percent to the low single digits, added Walczak. (I'm still sticking with 5.5. percent, however, as the By the Numbers honoree.)
State-by-state views: The Tax Foundation map of state revenue results below also gives you a visual clue as to where your state stands as far as tax collection.
For all y'all more textually inclined, the Tax Foundation also put the data in table form:
|
State Tax Revenues by Fiscal Year (in Billions) |
|||
|
State |
FY 2019 |
FY 2020 |
Change |
|
Alabama |
$11.5 |
$11.7 |
1.6% |
|
Alaska |
$1.9 |
$1.3 |
-32.7% |
|
Arizona |
$17.5 |
$16.4 |
-6.3% |
|
Arkansas |
$10.3 |
$10.1 |
-2.0% |
|
California |
$188.6 |
$169.9 |
-9.9% |
|
Colorado |
$15.3 |
$14.2 |
-7.2% |
|
Connecticut |
$19.1 |
$15.1 |
-20.9% |
|
Delaware |
$4.6 |
$4.5 |
-1.0% |
|
Florida |
$45.8 |
$44.0 |
-3.8% |
|
Georgia |
$24.0 |
$23.0 |
-4.4% |
|
Hawaii |
$8.2 |
$8.0 |
-1.9% |
|
Idaho |
$4.9 |
$5.3 |
8.2% |
|
Illinois |
$42.5 |
$43.3 |
1.8% |
|
Indiana |
$22.2 |
$21.0 |
-5.5% |
|
Iowa |
$10.6 |
$9.6 |
-9.5% |
|
Kansas |
$10.0 |
$9.7 |
-3.6% |
|
Kentucky |
$12.8 |
$12.9 |
0.7% |
|
Louisiana |
$12.2 |
$11.9 |
-1.7% |
|
Maine |
$4.7 |
$4.9 |
4.0% |
|
Maryland |
$23.9 |
$22.9 |
-4.2% |
|
Massachusetts |
$31.5 |
$28.9 |
-8.2% |
|
Michigan |
$29.8 |
$27.8 |
-6.6% |
|
Minnesota |
$28.2 |
$26.8 |
-4.9% |
|
Mississippi |
$8.2 |
$8.0 |
-2.4% |
|
Missouri |
$13.2 |
$12.4 |
-5.9% |
|
Montana |
$3.2 |
$3.2 |
0.1% |
|
Nebraska |
$5.8 |
$5.8 |
1.0% |
|
Nevada |
$10.0 |
$9.9 |
-1.1% |
|
New Hampshire |
$2.9 |
$2.8 |
-4.6% |
|
New Jersey |
$38.1 |
$37.9 |
-0.3% |
|
New Mexico |
$7.6 |
$7.3 |
-3.9% |
|
New York |
$88.0 |
$80.9 |
-8.1% |
|
North Carolina |
$29.2 |
$28.2 |
-3.5% |
|
North Dakota |
$5.0 |
$4.3 |
-12.6% |
|
Ohio |
$30.7 |
$30.6 |
-0.4% |
|
Oklahoma |
$10.6 |
$9.9 |
-6.5% |
|
Oregon |
$12.9 |
$11.8 |
-8.7% |
|
Pennsylvania |
$41.4 |
$39.1 |
-5.5% |
|
Rhode Island |
$3.7 |
$3.6 |
-3.3% |
|
South Carolina |
$11.4 |
$11.3 |
-0.5% |
|
South Dakota |
$1.9 |
$2.0 |
4.1% |
|
Tennessee |
$16.5 |
$16.6 |
0.5% |
|
Texas |
$62.9 |
$58.5 |
-6.9% |
|
Utah |
$9.7 |
$9.9 |
2.2% |
|
Vermont |
$3.4 |
$3.4 |
-0.2% |
|
Virginia |
$24.0 |
$23.1 |
-3.6% |
|
Washington |
$28.2 |
$27.2 |
-3.4% |
|
West Virginia |
$6.0 |
$5.5 |
-8.7% |
|
Wisconsin |
$20.0 |
$18.9 |
-5.6% |
|
Wyoming |
$2.1 |
$2.0 |
-6.7% |
|
District of Columbia |
$8.4 |
$8.4 |
0.0% |
|
U.S. Total |
$1,076.4 |
$1,017.1 |
-5.5% |
|
Sources: U.S. Census Bureau; Tax Foundation calculations. |
|||
Walczak elaborates on all these numbers in his paper. I encourage you to check it out.
Federal fiscal year-end on horizon: And if you're wondering about Uncle Sam's FY2020, which ends on Sept. 30, the news right now is not so good. Congress is struggling to come to a deal to keep federal offices open on Oct. 1 and beyond.
I suspect a short-term agreement will be reached, at least to get us past the November election. But if Capitol Hill stays true to form, that'll happen 10 days from now.
You also might find these items of interest:
- Property tax hikes sought despite pandemic downturn
- Sin taxes are lone revenue bright spot for many states
- Inflation puts alcohol taxes at historic lows, says study
| Coronavirus Caveat & More Information In 2020, we're all dealing with extraordinary circumstances, both in our daily lives and when it comes to our taxes. The COVID-19 pandemic and efforts to reduce its transmission and protect ourselves and our families means that, for the most part, we're focusing on just getting through these trying days. But life as we knew it before the coronavirus will return, along with our mundane tax matters. Here's hoping that happens soon! In the meantime, you can find more on the virus and its effects on our taxes by clicking Coronavirus (COVID-19) and Taxes. |
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