Louisiana is offering sales tax relief, while Oklahoma City, Florida and Mississippi point to big declines in tax revenue. Here’s the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic. For our recent coverage click here. Here’s a state-by-state roadmap.
The Louisiana Department of Revenue is waiving penalties for state sales tax returns due in April and May.
The relief applies to state sales tax returns and remittances due April 20 and May 20, according to a statement posted Tuesday on the department’s website.
Penalties will be waived for taxpayers who submit their March and April returns and pay the sales tax and any interest owed by June 30. Taxpayers who can’t meet that deadline may still be eligible for penalty relief if they reach a payment installment agreement by June 30, the department said.
Tourism Bust Slams Florida Tax Collections
Florida sales tax collections missed April projections by $598.2 million, largely due to declines in tourism, hospitality-related industries, and auto sales.
The state’s general revenue collections fell $878.1 million below original estimates, Senate President Bill Galvano said Tuesday in a report. Florida has no personal income tax, and more than 60% of its total tax collections are from sales taxes, according to the National Conference of State Legislatures.
Galvano attributed part of the drop to delays in payments of taxes or fees for three key revenue sources until June or later: corporate income taxes, highway safety fees, and corporate filing fees. Corporate income tax collections missed April projections by $246 million.
Still, “some or all of these declines in April and May” are expected to be recaptured in June, before the next fiscal year begins July 1, Galvano said.
OKC’s May Tax Receipts Slide Nearly 17%
Oklahoma City officials have unveiled a $1.66 billion budget proposal for the new fiscal year that would cut funding for 168 city jobs as the pandemic drives tax revenue sharply lower.
The announcement came Tuesday as new figures showed the pandemic blew a $3.7 million hole in the city’s projected May revenue of $22.3 million, falling 16.8% below projections. The data was the first solid look at the effects of the pandemic, reflecting collections for the last half of March and estimated collections in the first half of April, according to a separate city release.
Sales tax is Oklahoma City’s largest single source of revenue, making up 48% of operating revenue. Oklahoma law—unique among U.S. states—prohibits cities from using property tax to fund operations.
City finance officials estimate sales tax revenue will tumble 5% in the fiscal year that starts July 1. It’s a decline the city said would rank “in the neighborhood of the worst in Oklahoma City’s modern history.” The city saw a 4.7% year-over-year decline during the 1980s collapse of oil prices.
The new fiscal year budget would be 2.9% smaller compared to this year’s level, the city said, but with $114.3 million in federal aid it will rise by 4.4%.
Mississippi Tax Revenue Sliding
Mississippi expects a drop of $1.2 billion in tax revenue by the middle of 2021 because of the pandemic, State Economist Darrin Webb told the Senate Appropriations Committee.
For the fiscal year that ends June 30, the state will see a drop of $864 million compared with what was predicted in November, Webb said in a hearing Tuesday. He predicted a loss of $367 million, compared with previous forecasts, for the 2021 fiscal year.
It may be 2023 or later before the state economy begins to rebound to pre-pandemic levels, he said.