The state’s May sales tax collections were 29% lower than they were in the same month last year, marking another month of revenue declines fueled by the COVID-19 crisis.
Revenues from the state’s major taxes clocked in at roughly $2.1 billion in May, a decline of 13.5% — or roughly $331 million — from last May.
Year-to-date revenues are down nearly $2.5 billion, or 8.5% compared to last year’s revenues.
While collections from the state’s gross income tax are down 14.2% since last year, May income tax payments were just half a percent below what they were this month in 2019, and Treasury officials expect to make up some of the lost ground in July, when income tax payments typically due in April come due.
The declines in last month’s sales tax revenues eclipse the greatest drops seen during the great recession. In June 2009, sales tax collections dropped 18.4%.
Year-to-date sales tax collections are down just 0.3% from where they were at this point last year, but revenue officials warned that collections might drop further in the coming months.
Because sales tax collections operate on a one-month time lag, the collections reported Friday reflect purchasing in April, when the state was in the strictest stage of its lockdown.
But, the majority of direct federal stimulus payments were made in April and were mostly completed by May. Absent additional aid, the stimulus effect will fade, and sales tax revenues may drop further in the coming months.
Corporate business tax revenues also saw a significant drop last month, falling 31% from where they were last May. So far this year, CBT collections are down $2.8 billion, or about 13.2%, compared to last year.
The state expects part July tax collections to cut out part of that deficit, though they expect the summer collections to have a smaller impact on the CBT than on the sales tax because businesses have more latitude to alter tax payments to account for economic downturns.
The state’s gas tax fell nearly 59% last month, and tax revenues on petroleum products fell by a similarly staggering 57%.