Iowa has experienced a $307.3 million, or 48%, decline in net tax revenue collected between March 19 and April 24 when compared with the same period a year ago, a new report by the Legislative Services Agency shows.

The report, issued today, predicted that tax revenue consequences of the pandemic will likely become more severe in the coming weeks. However, the full impact the pandemic has had on tax collections won’t be fully known until July when delayed tax payments are deposited, the report said.

In mid-March, after Iowa Gov. Kim Reynolds ordered thousands of businesses to close in an effort to slow the spread of the novel coronavirus, the state’s revenue department granted deadline extensions for several types of annual state tax returns and tax payments. 

Those orders have resulted in a reduction in tax collections, an unknown amount of which may not be recovered because of declines in consumer spending.

According to the report, between March 19 and April 24 the state has experienced:
– A $181.5 million decline in individual income tax payments with returns. During the same period in 2019, $206.8 million was collected; this year, $25.3 million has been collected, an 87.8% drop.
– A $57.7 million decline in corporate income tax collections. During the same period in 2019, $138.4 million was paid; this year, $80.8 million has been collected, a 41.7% decline.
– A $26.7 million drop in gambling tax collections. During the same period in 2019, $32.9 million was collected; this year, $6.2 million has been collected, an 81.2% decline.
– A $5.3 million drop in sales/use tax collections. During the same period in 2019, $206.4 million was collected; this year, $201.1 million, a 2.6% decline.

Overall, Iowa collected $332.4 million in tax revenue between March 19 and April 24, according to the report. In 2019, $639.7 million collected during the same period.

“Some portion of the revenue reduction experienced between mid-March and the end of July will be a real reduction in tax collections, while some portion will be the result of tax due date delays initiated by the state,” the report said. “It will not be until the delayed tax payments have been deposited that the economic impact of recent events can be reasonably estimated.”