Wednesday, April 24, 2024

Official: Idaho revenue drop due to extended tax deadline

| May 7, 2020 2:24 PM

BOISE, Idaho (AP) — Idaho's general fund revenue in April plummeted from initial forecasts, but officials said Thursday that's because the deadline for paying state income taxes was moved from April 15 to June 15 due to the coronavirus.

Officials with the state Division of Financial Management said they expect that reduced revenue to bounce back by the new deadline.

It's "a shift of revenue from April to June,” said Alex Adams, the division's director.

Republican Gov. Brad Little extended the tax deadline to reduce the economic hardship due to the pandemic and the shuttering of much of Idaho's economy beginning in March. More than 125,000 unemployment claims have been filed in the state since its first confirmed virus infection on March 13.

April is typically the state’s biggest revenue month because of income tax payments. But the agency said it collected only $315 million in April, about $470 million, or 60%, less than expected from a January forecast.

That money is now expected to arrive in state coffers over the next several weeks ahead of the new deadline.

Adams also said 2019 income tax revenue isn't expected to be hurt by the pandemic because the virus didn't start closing down Idaho until 2020.

Overall, with April numbers, Idaho has collected $3 billion through the 10th month of the current fiscal year, which is $356 million, or 10.7%, lower than anticipated from the January forecast.

However, Adams said, factoring in the expected income tax still outstanding, sales tax, a potential drop in tax refunds the state pays out and other factors, the state should finish out the fiscal year in June with a balanced budget as required by the Idaho Constitution.

“I feel very positive on our ability to close the books and have a positive balance,” he said, noting a tentative balance estimate of $50 million.

Sales tax for April, which reflects March sales activity, was down only slightly despite Little's imposing a stay-at-home order March 25 due to the quick spread of the virus.

Adams said panic buying and an uptick in online purchases by Idaho residents stuck at home appears to have helped boost sales tax revenue.

The stay-home order was lifted May 1 and Idaho has entered a less-restrictive first stage of Little's four-stage plan to return Idaho to near normal. However, a possible second wave of infections could delay or reverse the process.

Fiscal year 2021 starts July 1 with no clear indication of how long Idaho residents will be dealing with the pandemic or what that might do to the state's revenue.

Looking ahead, Adams said agencies have been asked to prepare for a 5% cut to their budgets, but he said no formal decision to impose such a cut has been made.