Tri-Cities sales tax collections back to more moderate year-over-year gains in April


Tri-Cities sales tax collections backed off March’s double-digit year-over-year gains in April for a more moderate growth rate.  Other East Tennessee metro areas followed a similar pattern.

­­­­Here’s how those April year-over-year change looked according to seasonally adjusted collection numbers from MTSU’s Business and Economic Research Center.

  • Morristown, up 8.2%
  • Cleveland, up 7.8%
  • Knoxville, up 6.3%
  • Kingsport-Bristol, up 6.2%
  • Johnson City, up 5.6%.

The Johnson City and Kingsport-Bristol metro areas have followed a similar year-over-year trend pattern since December. The trend line almost merged beginning in February – a shift from what has been a normal picture of big swings in Kingsport-Bristol, followed by equally big declines compared to a slow, steady progress in Johnson City.  Both metros have been positive on the year-over-year metric since April last year with one minor exception. Kingsport-Bristol saw a 0.8% drop in February.

April’s collections in Kingsport-Bristol were up $332,000 from March while the month-over-month gain in the Johnson City metro area was only $6,000.

Here’s how that month-over-month metric looked for East Tennessee metro areas:

  • Morristown, up 5.9%
  • Kingsport-Bristol, up 2.1%
  • Cleveland, up 1.7%
  • Knoxville, up 0.8%
  • Johnson City, up 0.04%

Statewide sales taxes were $37.7 million more than the estimate for April and were 8.5% more than April 2015. April collections reflect retail business activity that occurred in March.

Tennessee tax revenues also exceeded budgeted estimates in April.

Department of Finance and Administration Commissioner Larry Martin said that overall April revenues were $1.8 billion, which is $185.0 million more than the state budgeted.

“Total reported revenues in April reflect significant improvement over this time last year in both sales and business taxes,” Martin said.  “While franchise and excise taxes and income tax revenues are typically large in the month of April, much of the state’s revenue growth is a result of strong sales taxes, reflecting consumer confidence in Tennessee.”

On an accrual basis, April is the ninth month in the 2015-2016 fiscal year.

According to the Commerce Department, U.S. retail sales recorded their biggest increase in a year in April as Americans stepped up purchases of automobiles and a variety of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.

The Commerce Department said retail sales were up 1.3% for the month, the largest gain since March 2015.

Excluding automobiles, gasoline, building materials and food services, retail sales shot up 0.9 percent last month after an upwardly revised 0.2 percent gain in March.

These so-called core retail sales correspond most closely with the consumer spending component of the gross domestic product.

The local retail sector tends to be more in sync with the national monthly retail pattern than what’s seen in the other two economic sectors (the labor market and home sales) where monthly data is available.

The non-adjusted year-over-year, moving average sales tax collection trend for both the Johnson City and Kingsport-Bristol began steadily improving  April last year. November was the first month on that metric where Kingsport-Bristol came off the upward path, but it was followed by gains for the following two months. It has been flat since February.

The Johnson City metro area saw seven months of gains swoon in December, January and February. It flattened out in March then made a sharp increase in April.

The moving average is used to take the noise out of the numbers and shows a more reliable long-term trend line.

 

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