Create an Account - Increase your productivity, customize your experience, and engage in information you care about.
View All Posts
Posted on October 14, 2016 at 5:08 PM by Paige Worsham
August 2016 Collections – October 2016 Distributions
This month the Department of Revenue will forward to NC Counties $244,753,451.60 million in sales tax revenues from August collections. This is a decrease of $36.49 million from the previous month, and a decline of $5.90 million over the same month last year.
These numbers are disappointing, as last month’s gains were hopefully a sign of slow but steady growth. However, it should be noted that, according to the NC Department of Revenue’s statewide Statement of Collections, nearly $53 million was withheld for sales tax returns. So some of the downturn could be the result of substantial refunds.
Nonetheless, we should be a little cautious, as the Federal Reserve just adjusted their GDPNow Forecast downward for the third quarter. They are now projecting 2.2% real GDP growth, down from 3.5% at this same time last month. They indicated that this downgrade is a result of much lower than expected real nonresidential structures investment growth and a decline in real government spending.
The good news for next month’s distributions (September 2016 collections) is that, according to the Richmond Federal Reserve’s Carolinas Survey of Business Activity, “the region's economic expansion may have picked up a little in September, while respondents remained optimistic about business activity in the coming months. The current general business conditions indicator regained some ground in this month after falling in August to its lowest reading in more than 3 1/2 years.”
Going forward, however, economists remain cautious about the Carolinas economy. Surveys suggest that area employers are less interested in hiring, and those that will hire are expecting to face an uphill battle due to the region’s persistent skills mismatch. It is clear that much of the current and expected near future growth is a result of strong consumer spending, not business expansion. As a result, most economists are not moving off earlier predictions of 2.0 – 2.5% economic growth for the remainder of the year.
New Sales Tax Webinar
If you have questions about the revised NC Department of Revenue sales tax distribution report format, or about the required school capital set-aside calculations, be sure to check out the new webinar and suggested methodology spreadsheet, available on the NCACC web site at this link: http://www.ncacc.org/528/QA-on-Local-Sales-Tax-Distribution-Plan