Building supply, online and automobile sales all rose by double digits in June, although other parts of Maine’s economy still are down significantly compared to last year, new tax data from Maine Revenue Services showed.
Certain retail sectors seem to be recovering faster than hospitality businesses, whose sales also rose from May to June but were still down significantly from the previous year. The retail uptick follows trends related to coronavirus pandemic restrictions, with more consumers shopping via the internet and tackling home improvement projects.
Retailers in the latter sector reported very strong second quarter sales this week, with sales at Lowe’s up 30 percent and Home Depot up 23 percent.
“A lot of people are doing renovations,” said Curtis Picard, president and CEO of the retail association of Maine at a Wednesday meeting of a state economic recovery subcommittee he sits on. “I think they’re recognizing that if they’re going to have to be there long term, they might as well make it as nice as possible.”
Building supply businesses paid nearly $376.2 million in taxes to the state in June, up 13 percent from May and up 23 percent from June of 2019. Automobile dealers paid $600 million in taxes in June, up 22 percent from May and up almost 16 percent from last June. “Other retail,” a category that includes online sales taxes, paid $481.7 million in taxes, up 16 percent from May and up 39 percent from the previous June.
Picard said online sales taxes have curbed the overall decline in Maine’s tax receipts, especially since last October, when the state enacted the marketplace facilitator law that enabled Amazon.com and other online retailers to fully collect and remit sales taxes.
“I think that is a big piece of why Maine’s tax receipts, although they’re down, are not down as much as they would be if we didn’t have this law in place,” Picard said.
Adam Lee, chairman of Lee Auto Malls and a subcommittee member, said his sales still are down about 10 percent from last year, and getting enough inventory remains a problem. Normally he keeps 200 to 220 Toyotas in stock, but his dealerships now have 60. He said automobile manufacturers, which curtailed activities earlier in the pandemic, are ramping up car-making.
Lee questions whether the rise in June sales will stick.
“If Congress doesn’t figure out the new wave of funding, people aren’t going to go buy cars,” he said.
Picard is frustrated with the slow government response in Maine to the Economic Recovery Committee’s report submitted to Gov. Janet Mills in July, asking for $1.1 billion to stabilize the Maine economy. Among other things, the report recommended $430 million to stabilize businesses, including $350 million in employer grants to for-profit and nonprofit businesses.
Picard said that he, HospitalityMaine CEO Steve Hewins and Maine Tourism Association Director Tony Cameron met with Economic Development Commissioner Heather Johnson at least two weeks ago about what the state would roll out in financial relief, especially for the lodging and restaurant businesses that continue to struggle.
“We’re now more than a month after the committee has turned in the report to the governor, and we still don’t have an economic relief plan out there,” he said. “It frustrates me, the lack of a sense of urgency.”