IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v73y2020i3p619-644.html

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

Author

Listed:
  • Jeffrey Clemens
  • Stan Veuger

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.

Suggested Citation

  • Jeffrey Clemens & Stan Veuger, 2020. "Implications of the COVID-19 Pandemic for State Government Tax Revenues," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 619-644, September.
    • Handle: RePEc:ntj:journl:v:73:y:2020:i:3:p:619-644
    DOI: 10.17310/ntj.2020.3.01
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2020.3.01
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2020.3.01?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    More about this item

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:73:y:2020:i:3:p:619-644. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.