HdL Companies, a leading provider of revenue enhancement and economic development services for local governments, has released its fourth quarter 2024 sales tax data, revealing a 1.2% decline in local one cent sales and use tax receipts compared to the same quarter last year, after adjusting for accounting anomalies.
Andy Nickerson, CEO of HdL Companies, commented on the results: "The fourth quarter is typically the highest sales tax generating period of the year, but this year we saw diminished returns as consumers grappled with tariff concerns and reduced discretionary spending. Over the past two years, statewide results have consistently declined, primarily due to suppressed activity in the autos/transportation and building/construction sectors as a result of sustained high interest rates."
The data indicates that new and used car sales have pulled back, with only leasing activity showing improvement. This trend suggests that buyers are waiting for more favorable economic conditions before committing to long-term obligations. The building-construction sector also experienced drops across multiple categories, including building materials, plumbing/electrical supplies, and contractors, as property owners delayed repairs and improvements.
During the holiday shopping period, brick-and-mortar general consumer goods retailers saw a 2.4% slump, further impacted by lower gas prices. Store closures of merchants selling variety/low-priced items and weaker returns from department stores were most significant. However, online retailers showed growth, reflecting a shift in consumer spending habits towards value and discounted items.
Receipts from fuel and service stations mirrored the overall decline, impacted by lower global crude oil prices. While this dynamic hurt sector results, it allowed for more disposable income to be spent in other areas. Restaurants sustained a modest gain of 1.3%, with fine dining establishments seeing a decline consistent with spending trends in other sectors. The 'return to office' movement could increase foot traffic for eateries in metropolitan centers.
“The fourth quarter also marks the end of the calendar year, with 2024 showing a 1.2% decrease overall compared to 2023,” noted Nickerson. As national tariff discussions continue and the Federal Reserve Board has not indicated any relief through lower interest rates, HdL Companies anticipates muted growth expectations for 2025. "The theme of the current economic outlook is uncertainty," Nickerson added.
View a complete table of sector and regional data. Each quarter, HdL Companies reports on California’s sales tax receipts and their impacts on local jurisdictions.
About HdL Companies
HdL Companies supports local governments with revenue enhancement, technology and consulting services. Founded in 1983, HdL Companies’ comprehensive approach to revenue management is trusted by more than 900 local government agencies nationwide. The company has successfully recovered more than $4 billion in revenue for clients. Visit hdlcompanies.com for details.
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As national tariff discussions continue and the Federal Reserve Board has not indicated any relief through lower interest rates, HdL Companies anticipates muted growth expectations for 2025.
Contacts
For further information, please contact:
Melissa Heiselt, HdL Companies Marketing Analyst 714.879.5000
