Local sales stay on trend despite pandemic

Jun 26, 2020

How have you been shopping since COVID-19?

Transaction privilege tax, often simplified as TPT or sales tax, is an indicator of consumer activity in any given area. Along with other economic meters, it gauges how people are spending their money.

These data have drawn particular interest during COVID-19 and locally have drawn surprise. A rise in unemployment, for instance, did not appear to slow consumerism in Maricopa. While the pandemic forced the closure of non-essential businesses, shoppers found their items at essential businesses. Instead of buying a shirt at a local boutique, shoppers bought clothes at big-box stores.

That shifted who pocketed the money. So, there has not yet been a dramatic fall in overall business this spring. Maricopa’s sales tax collection stayed on the same trend as previous years while maintaining a growth gap over last year.

Maricopa sales tax collections have been on trend despite the pandemic. Data: ADOR

Because of the shift in shopping patterns, however, individual businesses are suffering and in danger of going under.

According to the Arizona Department of Revenue, many businesses are struggling to meet their TPT payment deadlines. Officials are working with them on a case-by-case basis, including applications for a late-payment/late-filing penalty abatement program.

“The Arizona Department of Revenue prioritizes working with customers rather than taking enforcement actions when reasonable as this approach is more beneficial to the taxpayer and efficiently serves state and municipal interests,” the department stated in a news release.

For Pinal County and Maricopa, a continuously strong classification has been contracted construction. It has remained the biggest source of monthly TPT funds.

The fallout of businesses in arrears in rent or who lost clients or loaded up their credit with loans to get by may yet be felt across the community as harshly as it has been felt by individuals.

Sales tax collections usually slide a bit during summer as many families go on vacation and the heat keeps visitors at bay and limits community events. Vacations and travel are not anticipated to be as popular this year. The dramatic increase in confirmed COVID-19 cases in June is also expected to impact business and consumerism.