Washington State: 25% Drop in Sales Tax Revenue May Over May

by Aaron Thompson, on June 5, 2020 at 3:28 PM

Earlier this year as Americans watched news coverage of the Coronavirus outbreak around the world, the state of Washington was the first in our country that garnered attention due to the rapid spread of the virus in the area. Reflecting back to February and into March, we heard reports of Washington nursing home deaths and companies like Boeing suspending their manufacturing efforts. Along with New York and California, Washington called in the National Guard to support the response efforts. 

As the nation cautiously begins to return to a new normal, the impact of the pandemic on state and local government revenue begins to become clearer and given the early impact, the Washington sales tax data that was recently released gives state and local governments a better idea of what the impact could mean for their revenue.

In Washington, sales tax data is released approximately two months after the end of month. For the period covering February, sales taxes dropped close to 1%. For the period covering March, sales taxes dropped an astonishing 25.5%. Like other governments across the country, these numbers were an unexpected diversion from revenue growth. December saw 5.4% growth and January saw 6.1% in the Evergreen State.

At Localgov, we have closely been following the impact of revenue losses. Communities across the nation have been impacted more sharply and swiftly during this crisis compared to other struggles in the past. As businesses shut their doors and citizens adhered to stay-at-home orders, the revenue that local governments depends on to provide essential services, has dramatically decreased. Furthermore, many governments allow for sales tax forbearance. While this option is a necessary tool to support taxpayers, it compounds the problem for local governments experiencing revenue delays and shortages.

For local governments, the main priority right now is supporting their citizens and businesses with all available resources. It is critical that government operations are fully funded and functional at this time to meet the needs of their communities. 

Localgov’s Finance Recovery Program can help you remain steadfast. We have been working with tax revenue streams from Washington to New York for the past 25 years and have returned millions in lost revenue to local governments.

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Topics:local governmentcovid-19localgovSales Tax