State tax collections across the country continued their downward trend during the third quarter of 2008, according to a preliminary report issued last week by the Rockefeller Institute of Government.
The report shows that total tax revenues for the 42 states surveyed for the Institute’s “flash” report were essentially flat, rising at a rate of only 0.1% during the third quarter of 2008, when compared to the same quarter a year earlier. That was down sharply from the 50-state growth rate of 3.6% during the second quarter of 2008. This was the first quarter since the 2002 recession that state tax revenues failed to increase from the previous year.
Seventeen of 42 early-reporting states reported declines in total tax revenues, when compared to the same quarter in 2007. When adjusted for economy-wide inflation of 2.7%, state tax collections declined overall by 2.6%.
“We expect revenue collections to deteriorate further in coming quarters and believe they are likely to be down substantially when income tax returns are filed in the April-June quarter of 2009,” said Donald J. Boyd, senior fellow at the Institute and co-author of the report. “We expect further revenue shortfalls and mid-year budget cutting among states as the fiscal year progresses.”
Growth in the two largest taxes that make up states’ overall tax collections, income and sales taxes, was either flat or down when compared to last year. Personal income tax revenue was up only 1.5% during the third quarter, while sales tax collections dropped by 0.7%. Corporate income tax collections, while representing a relatively small percentage of the tax base, were down a dramatic 15.3% from last year.
“The sales tax decline is particularly noteworthy because it reflects the leading edge of the just-beginning decline in consumer spending,” Boyd said.
Quarter over quarter, states in the Far West fared the worst in the preliminary report, while Southeastern states were down about as much this quarter as last quarter.
The Institute expects to issue its formal 50-state report, based on US Census data, at the end of December.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment