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Oklahoma sales tax collections slide in March

Oklahoma sales tax collections slide in March

Journal Record: Oklahoma sales tax collections slide in March

April 15, 2009
OKLAHOMA CITY – State sales tax collections in March slid 3.4 percent below receipts for the same month a year ago, a strong sign of the continuing effects of the recession on the Oklahoma economy.

A revenue report released by state Treasurer Scott Meacham also showed that for the first time since 2003, year-to-date revenue collections were below the estimate upon which the state budget is based.

All major tax categories were lower in March. Total revenue collections were 19.1 percent below the prior year and 17.2 percent below the estimate.

Nine-month revenue totals were off $33.4 million or 0.8 percent from a year ago and were $34.5 million below the estimate.

Meacham said that despite the latest figures, Tax Commission projections indicate the state should be able to finish out the fiscal year ending June 30 without a revenue failure that would require across-the-board cuts in current budgets of state agencies.

He said the state still has a $262 million cushion to pay its bills for the next three months.

State agencies are facing significant cuts for the next fiscal year because of an estimated revenue shortfall exceeding $600 million.

“While federal stimulus money will help offset some of those reductions, we will most certainly have to cut spending (for the coming fiscal year),” Meacham said.

The slide in sales tax collections in March was considered significant. The strength in sales taxes had surprised officials after a drop-off in the collection of energy and income taxes in recent months.

February sales tax collections were off 2.4 percent, but that was mainly due to an increase in refunds to vendors. In January, sales taxes were the one bright spot in the revenue report, growing by 7.6 percent.

The last time state revenue had fallen below year-to-date estimates was in June 2003, the end of the 2003 fiscal year.

Meacham said the revenue decline is in line with the Tax Commission’s revised February projections.

In March, combined personal and corporate taxes were down 16.6 percent from a year ago, gross production taxes on oil and gas were off 40.7 percent and motor vehicle taxes were down 25.4 percent.

For the nine-month period, net income taxes were down 3.4 percent, but sales taxes were up 4.3 percent and gross production taxes were up 23.1 percent, thanks to high energy prices earlier in the year. Motor vehicle taxes were off 28.7 percent.

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