HdL Companies Reports Resilient California Sales Tax Returns in 1Q2024
11 Julio 2024 - 11:00AM
Business Wire
The Golden State showed resilience reflected in California’s
local one-cent sales and use tax receipts for the first quarter of
2024. Covering January through March, data came in just 0.2% lower
compared to the same period last year, after accounting for
anomalies. Despite the first quarter traditionally being the lowest
sales tax generating period, this year’s returns were closely
aligned with the previous year’s figures.
HdL Companies CEO Andy Nickerson commented, "While the slight
dip in tax receipts reflects some ongoing economic challenges, the
overall stability in returns is a positive sign for California’s
economic resilience. We’re seeing a promising trend that suggests a
solid foundation for future growth."
One sector that continued to show declines was
autos-transportation, which fell by 7.5% due to high interest rates
increasing long-term financing costs and a significant spike in
insurance rates, hurting prospective buyers’ budgets. Fuel and
service stations also experienced a drop compared to last year.
However, with Californians preparing for summer travel, slightly
elevated gas prices are expected to transition this sector to
positive results by 2025.
During the post-holiday shopping period, general consumer goods
saw a modest rebound with a 0.5% increase. Although retailers
selling gas were impacted by fuel prices, this did not prevent
family apparel and department stores from boosting returns.
Restaurant activity contributed a steady growth of 2.1%. Fine
dining establishments, however, remain hindered as more affordable
menu options are preferred. Some eateries have made operational
changes while implementing AB 1228, though it’s too early to
determine the bill’s impact on receipts.
Business-industry sectors experienced significant gains, with
investments in office supplies, furniture, and energy projects
driving a 3.6% increase this quarter. Strong fulfillment center
direct payments highlighted sustained logistical expansion.
Improved returns via the countywide use tax pools, reflecting
e-commerce preferences, led to a 1.6% improvement in overall pool
allocations.
Statewide, 2024 begins on a more positive note compared to the
trends seen in 2023. Nickerson added, "These buoyed first-quarter
results may signify a stabilization, easing tax revenue concerns as
we look forward to the next growth cycle. The Federal Reserve's
stance on the Fed Funds Rate will be a crucial factor in
determining whether we face economic stagnation or a boost in
consumer spending. Additionally, tourism and local travel during
the summer period could further enhance confidence in our economic
outlook."
View a complete table of sector and regional data. Each quarter,
HdL Companies reports on California’s sales tax receipts and their
impacts on local jurisdictions.
About HdL Companies
HdL Companies is dedicated to supporting local governments
across the U.S. with revenue enhancement, technology and consulting
services that enable cities, counties and special districts to
better serve their constituents. Founded in 1983, HdL Companies’
comprehensive approach to revenue management is trusted by more
than 750 local governments across the U.S. The company successfully
recovered more than $3 billion in revenue for client agencies. For
more information, visit hdlcompanies.com.
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For further information, please contact: Melissa Heiselt,
HdL Companies Marketing Coordinator 714.879.5000