DES MOINES — State tax collections took a nearly 39 percent hit in April, driving down current fiscal year tax receipts by $84.4 million.
But not all the downturn was due to the onset of the coronavirus epidemic in Iowa, according to the Legislative Services Agency.
State revenue from July through April totaled nearly $6.325 billion, but receipts for individual and corporate income taxes took a double-digit plunge last month when state Department of Revenue officials pushed back the deadline for filing income tax returns and mailing in taxes owed until July.
Normally, Iowans were required to file their individual income tax returns by April 30, but deadline was moved back to July 31 because of the coronavirus impact on the economy.
It likely will be a few months before state officials have a good read on the fiscal 2020 revenue picture, Jeff Robinson, an analyst with the Legislative services Agency said Friday.
Year-to-date state tax receipts are running about 1.3 percent below last year’s $6.41 billion pace.
“Payments with individual income tax returns are way down, but that’s from tax year 2019 and they’re way down because the Department of Revenue delayed the due date until July 31, so people aren’t sending in their payments and they’re not filing their tax returns because of that,” Robinson said.
For the first 10 months of fiscal 2020, personal income tax receipts were down $201 million, while corporate income tax collections were off by $31.5 million.
But state sales and use-tax collections are up by $157 million even though a sizable part of the Iowa economy has been shut down since mid-March because of COVID-19 restrictions.
“Oddly, we’re still waiting for actual receipts to show that big impact from this economic shutdown,” Robinson said.
“The weird part of the news is that this awful month was not due to the economic situation,” he added. “So if bad news is coming for the economic situation, it’s coming next month or the month after.”
The state fiscal year ends on June 30, but state officials won’t officially close the books on fiscal 2020 until sometime in September.
The state ended fiscal 2019 with a $289 million balance.
According to research by the Pew Charitable Trust, Iowa could operate for 37 days on its reserves, which include rainy day funds equal to slightly more than 10 percent of the state’s general fund budget of about $8 billion.
Robinson said the economic consequences of business closures, restrictions on gatherings and other aspects of the pandemic, combined with extensions on paying taxes, likely will be significant when they start to show up in state tax collections, possibly with the monthly report in May.
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