The Utah State Tax Commission managed to collect nearly $14 billion in state and local revenues for the fiscal year 2021, even as pandemic-induced economic fallout continued to be felt across the country.
In total, the commission collected $13.97 billion during the fiscal year 2021, which began in July 2020 and ended this past June, according to the tax commission’s annual report released on Wednesday.
That is a $3.26 billion increase in revenues — or 30.5% — compared to what the state collected during the fiscal year 2020, the commission found. The state’s Education/Uniform School Fund and General Fund also grew by 57.2% and 13.5%, respectively.
As Utahns braced early in the COVID-19 health crisis in 2020, tax revenues were down, the commission reported, by $18.54 million, or 0.2%, in the previous fiscal year.
Commissioners attributed the flush, new revenues to pandemic-induced IRS tax filing extensions that occurred in 2020 and 2021. Extending the tax filing deadline from April 15 to May 17, according to the report, “pushed revenues that typically would have occurred in FY 2020 into FY 2021.”
A longer-term explanation for the increase in revenues, according to Commissioner John L. Valentine, is that Utah’s economy is continuing to perform strongly despite the pandemic.
“Utah’s economy is doing very well,” Valentine said. “Our unemployment rate is still low and we have amazingly been resilient throughout the pandemic and throughout the economic upheavals that its caused.”
About $6.11 billion of revenues came from individual income tax, followed by $2.62 billion in state sales and use tax, more than $794 million in local sales and use tax, upward of $742 million in corporate franchise tax and $379.5 million in motor fuel tax. It also collected approximately $720 million worth in delinquent taxes.
Valentine said the federal stimulus payments from the Coronavirus Aid, Relief, and Economic Security Act helped stimulate state sales tax revenues.
“The (stimulus payments) had an effect because it gave (people) money and people then bought goods and services,” he explained.
Of all the revenue collected, about half was deposited into the state’s Education Fund, 21.2% went toward the General Fund and 10.9% went toward the Transportation Fund, 16% went to the Fiduciary Fund and 2.6% went toward “other” funds.
“FY 2021 was another unusual year, as the state continued to navigate the COVID-19 pandemic. Businesses, including restaurants, bars, gyms, movie theaters, golf courses and other nonessential businesses, started reopening; meanwhile, thousands of employees remained out of work,” according to the report. Yet, “The overall Utah economy performed exceptionally well in FY 2021.”
Furthermore, the commission in its report said it responded to 540 bills during the Legislature’s 2021 General Session. The commission added that about 53% of its over 700 employees currently work remotely from home.
Department of Motor Vehicle wait times
The Utah Department of Motor Vehicles, which is run by the tax commission, also reduced wait times for its services, the commissioners reported.
Valentine said some Utahns used to wait up to two hours when registering their cars or getting car titles changed.
“In 2020, we had huge lines,” he explained. “We really heard the issues that were being given to us and so we did some important actions.”
After implementing more ways for Utahns to complete DMV services online, wait times for the department are now under 20 minutes on average, Valentine noted.