Virginia closed out 2020 on a government revenue good note – with General Fund revenues up 15.1 percent year over year for the month of December.
A press release from the office of Gov. Ralph Northam attributed the strong revenue month to growth in payroll withholding, corporate income tax, sales and use taxes, and recordation tax collections.
On a fiscal year-to-date basis, total revenue collections are up 7.8 percent through December over the same period for 2019, well ahead of the annual forecast of 1.2 percent growth.
“Our diligence in following our long-term financial plan has put Virginia in a stronger position to weather this health crisis and ensure a sustainable recovery,” Northam said. “As we look ahead to a post-pandemic world, this continued solid revenue performance gives us confidence that we can meet our budget priorities, enhance our cash reserves, and provide relief to Virginians who need it.”
With an additional deposit day compared to the previous year, collections of payroll withholding taxes rose 10.6 percent in December. Collections of sales and use taxes, reflecting November sales, rose 5.2 percent in December.
November represents the beginning of the holiday shopping season, which had fewer shopping days after Thanksgiving than the prior year.
“A clearer assessment of the season will be possible after receiving December sales tax payments due in January,” Secretary of Finance Aubrey Layne said. “January nonwithholding payments will also give us a better indication of taxpayer behavior for calendar 2020 tax returns.”
Collections of wills, suits, deeds, and contracts — mainly recordation tax collections — were $63.6 million in December, compared with $40.4 million in December of the prior year.
December is a significant month for corporate income tax collections as quarterly estimated payments are due for most corporations and refunds from extension returns are processed. With the main refunding season completed and the first two estimated payments received, collections of corporate income taxes grew 37.7 percent on a year-to-date basis, compared with the forecast of 19.9 percent growth.
Fiscal year-to-date, payroll withholding collections have grown 2.9 percent, slightly ahead of the annual estimate of 2.7 percent growth. Collections of sales and use taxes have risen 6.7 percent, well ahead of the annual estimate of a 2.6 percent decline. Recordation tax collections are up 38.9 percent, far ahead of the annual forecast of 13.6 percent growth.
On a fiscal year-to-date basis, total revenue collections rose 7.8 percent through December, ahead of the annual forecast of 1.2 percent growth.
The full report is available here.
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