Inflation Bites Into State Sales Tax Hauls, Warns of Boom’s End

More than half of states around the country saw sales tax collections fall in April for the first time since last summer, an early warning sign that trouble may be brewing for budget officers in fiscal 2023 as consumers adjust their spending habits because of decades-high inflation.

Twenty-six states—Maryland, Connecticut, Massachusetts, and Iowa among them—saw lower sales tax revenue in the month than a year earlier, after adjustments for inflation. Sixteen others reported slower growth compared with a year earlier, according to an analysis by the Urban-Brookings Tax Policy Center.

While monthly reports can be noisy, April’s sales tax ...