Legislative Budget Office of the Legislative Service Commission
payments and other personal transfer receipts (+$613.1 billion), resulting in a seasonally
adjusted annualized 34.3% rate of increase in personal income for the quarter.
020’s second quarter was more than offset by the increase in unemployment compensation
Consumers received income support from federal stimulus checks, additional
unemployment compensation from the federal CARES Act, and a number of businesses kept some
employees on payroll after receiving loans from the federal payroll protection program. The
income support from the federal fiscal response to the pandemic appears to have eliminated (at
least temporarily) the economic downdraft of the COVID-19 pandemic on the sales and use tax. Also,
both Ohio employment and unemployment data have shown marked improvements of late. For
example, Ohio's unemployment rate declined to 8.9% in July 2020 from the rate of 11.0% in June
employment gained 62,700 workers (seasonally adjusted) in July, with most of the gains from
employment in service-producing industries. That gain followed a payroll employment increase of
in April and May, the unemployment rate was 17.6% and $13.9%, respectively). Nonfarm payroll
improvement in the Ohio labor market and any additional federal personal transfer payments.
13,200 in June. The future performance of this tax source is likely to be dependent on continued
For analysis and forecasting, revenue from the sales and use tax is separated into two
parts: auto and nonauto. Auto sales and use tax collections generally arise from the sale of motor
vehicles, but auto taxes arising from leases are paid at the lease signing and are mostly recorded
under the nonauto tax instead of the auto tax.
Nonauto Sales and Use Tax
YTD FY 2021 GRF nonauto sales and use tax receipts totaled $1.75 billion, an amount
120.2 million (7.4%) above estimate and $155.4 million (9.7%) above revenue in the
corresponding period in FY 2020. Nonauto sales and use tax revenue of $802.6 million in August
was above estimate by $23.0 million (2.9%) and $17.3 million (2.2%) above revenue in the same
month last year. In July 2020, this tax source was $97.2 million (11.4%) above estimate. Generally,
a large part of a month’s nonauto sales and use tax revenue is from tax collection or tax
remittance on taxable sales in the previous month. After widespread lockdowns and business
closures in April and May, most businesses reopened in June. Thus, the increases in July and
August sales and use tax revenue are due, in part, to increased consumer spending and taxable
sales in June and July, respectively.
In the last quarter of FY 2020, this tax source fell $315.2 million (12.7%) below estimate;
quarterly receipts were $199.0 million (8.4%) below receipts in the corresponding quarter in
FY 2019. So, the turnaround in nonauto sales and use tax receipts in FY 2021 has been
remarkable. Chart 2 provides year-over-year growth in nonauto sales and use tax collections
since January 2020 and shows the rebound in nonauto sales tax revenue in recent months.
5 To address the economic fallout from COVID-19, the U.S. Congress passed the CARES Act at the
end of March 2020. The Act included cash payments of up to $1,200 (plus $500 for each child age 16 or
under) for each qualifying adult, an additional $600 per week on top of any state-provided unemployment
benefits through July 31, 13 weeks of unemployment benefits above that of each state’s unemployment
program, and unemployment benefits for self-employed and “gig” workers. The payroll protection
program is a loan program intended to subsidize payroll costs for eight weeks after those loans, some of
which are forgivable, are made. In the months following passage of the CARES Act, other federal support
programs have been enacted or modified.
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