Rhode Island Struggled With Collecting Taxes During Pandemic

Rhode Island Struggled With Collecting Taxes During Pandemic

Across the country total state tax revenue was down $46.4 billion from its pre-pandemic level in the four quarters ending June 30, 2020—the past budget year for nearly all states, according to Pew Research.

While states like Alaska reported tax collections off by 33.6%, other states also saw double digit declines but nothing like Alaska — North Dakota off 13.2%, Oregon down 12.3%, and California down 11.1%.

Six states actually saw increases in revenue in 2020 — Washington was up 3.8%.

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Rhode Island was down in tax revenue a moderate 3.6%.

In comparison to the rest of New England — Rhode Island finished better than most.

Maine, which has a similar population size as Rhode Island, actually saw a 2.6% increase in tax collection.

Vermont was down only 1.1% and Rhode Island was third.

Connecticut was down 4.2% and then New Hampshire was down 7.8% and Massachusetts was down 9.5%.

According to Pew, “Tax collections had been growing in most states until the COVID-19 outbreak but then took their steepest plunge in at least 25 years in the final quarter. Although at least some of this drop was expected to be recovered in the third quarter, nearly half of states still project revenue declines this fiscal year.”

State tax revenue from April through June 2020 collectively was lower by an extraordinary 25% from the same quarter of 2019.

"Receipts fell after the public health emergency disrupted large parts of the economy and set off a recession. But much of the sudden shortfall was due to the federal government’s decision—copied by nearly all states—to delay the April 15th income tax filing deadline until July 15th," reported Pew. "The delay pushed large sums of state personal and corporate income tax payments into the first quarter of the current fiscal year, aggravating the strain on many states’ budgets last fiscal year."