Implications of the COVID-19 Pandemic for State Government Tax Revenues

Jeffrey Clemens and Stan Veuger

National Tax Journal, 2020, vol. 73, issue 3, 619-644

Abstract: We assess the COVID-19 pandemic’s implications for state government sales and income tax revenues. We estimate that the economic declines implied by recent forecasts from the Congressional Budget Office will lead to a shortfall of roughly $106 billion in states’ sales and income tax revenues for the third quarter of 2020 through the second quarter of 2021 (the 2021 fiscal year for most states). This is equivalent to 0.5 percent of gross domestic product and 11.5 percent of our pre-COVID sales and income tax projection. Additional tax shortfalls from the second quarter of 2020 (the final quarter of most states’ 2020 fiscal years) may amount to roughly $42 billion. We discuss how these revenue declines fit into several pieces of the broader economic context. These include other revenues (e.g., university tuition and fees) that are also at risk, as well as spending needs necessitated by the public health crisis itself. Further dimensions of context involve fiscal support enacted through several pieces of federal legislation.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
https://doi.org/10.17310/ntj.2020.3.01 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

Related works:
Working Paper: Implications of the Covid-19 Pandemic for State Government Tax Revenues (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:73:y:2020:i:3:p:619-644

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().