COVID-19 Crushed Sales Tax Revenue, but Online Sales Helped a Little


Virginia’s fiscal year 2020 sales tax revenue performed well all the way up until April 2020 when sales tax revenue decreased 0.4 percent from April 2019; May saw sales tax revenue drop 12.5 percent from May 2019, indicating harm to Virginia’s retailers. At the same time, online sales were booming.

Online sales are taxed in Virginia, helping protect sales tax revenue during COVID-19. Walmart’s international eCommerce sales for the first quarter grew by 74 percent, while store sales grew 10 percent. Walmart’s second-quarter eCommerce sales showed 94 percent growth. In an earnings press release, Walmart said that ordering groceries online for in-store pickup helped boost its eCommerce sales, but the company performed well across the board. “Unprecedented demand for products across multiple categories led to strong top-line results. Certain incremental costs negatively affected operating income, including costs associated with enhanced wages and benefits as well as safety and sanitation,” the press release said.

For the first quarter, Amazon reported a 26 percent growth in their sales, and in the second quarter, a 40 percent increase. “From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” Jeff Bezos told investors.

But the same forces driving online sales growth has harmed many Virginia businesses. The Virginian-Pilot lists over 40 businesses that have been closed due to the COVID-19 economic crisis, ranging from chain stores to small businesses. The Richmond Times-Dispatch reports that at least 30 area restaurants have closed.

Some counties in Virginia have seen increased sales tax revenue despite retailers being closed in April and May. Isle of Wight County saw a 10 percent increase in sales tax revenue. “We actually had some retail sales or retail stores that were really hurt by COVID, were really struggling and yet we were seeing our sales tax numbers go up,” Assistant County Administrator Don Robertson told

Pete Snyder is a business philanthropist whose 30 Day Fund has helped over 700 small businesses since April. On The John Fredericks Show, Snyder blamed the government’s shutdowns of businesses for the crisis. “At the state level, there’s been absolute ineptitude as it relates to helping out small businesses. And you know these mandatory shutdowns that are arbitrarily set,” Snyder said. “You know they go back and forth and they have just crushed tens of thousands of businesses and small businesses all across Virginia. So these folks need help.”

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Eric Burk is a reporter at The Virginia Star and the Star News Digital Network.  Email tips to [email protected]
Photo “Virginia State Capitol” by Anderskev. CC BY 3.0

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