january state revenue collections report
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January state revenue collections down: Report

virginiaGovernor McAuliffe announced today that January revenue declined by 1.1 percent. As expected, payroll withholding dropped in January after a 15.1 percent gain in December because there was one less deposit day in January. Individual refunds increased in January, as the date for accepting returns was earlier this year than last year. Finally, refunds were issued to insurance companies in January, while last year they were issued in February.

On a fiscal year-to-date basis, total revenue collections rose 5.3 percent, well ahead of the revised annual forecast of 3.1 percent growth.  The main drivers of the revenue increase were the individual income tax and the corporate income tax.

“We continue to see an improvement in our major revenue sources,” Governor McAuliffe said. “Current trends show that Virginia’s economy is growing stronger. While that trend is welcome, it is critical that we keep an eye on long-term challenges that underscore the urgency of diversifying our economy to ensure stable growth and reliable services for our citizens.”

Collections of payroll withholding taxes fell 5.3 percent in January following a surge of 15.1 percent in December.  December and January are significant months for collections in nonwithholding, and receipts can be distorted by the timing of payments.  Taxpayers have until January 15 to submit their fourth estimated payment for tax year 2014 and some of these payments are received in December, so the two months must be considered together to assess growth.

Receipts of estimated payments for the two-month period rose 31 percent from last year.  In January, the Department of Taxation issued $86.3 million in refunds compared with $23.0 million last year.  This is the first month of the filing season and the date for accepting returns was more than a week earlier this year than last year.  Collections of sales and use taxes, reflecting December sales, rose 11.2 percent in January.  Collections of corporate income taxes were flat at $39.7 million in January, compared with receipts of $39.9 million a year ago.

Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $23.1 million in January, compared with $20.9 million in January of last year for growth of 10.8 percent.

On a year-to-date basis, collections of payroll withholding taxes – 64 percent of General Fund revenues — increased 4.2 percent, ahead of the revised annual forecast of 2.9 percent growth.  Year-to-date nonwithholding collections increased by 22.1 percent and ahead of the annual estimate of 6.3 percent growth.  Sales tax collections – 19 percent of General Fund revenues – increased 4.4 percent through January, ahead of the annual forecast calling for a 4.3 percent increase.

Through the first seven months of the fiscal year, corporate income tax collections have grown 18.3 percent from the same period last year, ahead of the annual estimate of a 0.1 percent increase.  Adjusting for the accelerated sales tax program and the 0.1 percent sales tax transfer to transportation required by the provisions of HB 2313, total revenues rose 5.4 percent through January, ahead of the adjusted forecast of 3.0 percent growth.

Read the full report here.

News Desk

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