Total general fund revenues for the Commonwealth of Virginia fell 1.2 percent in February compared to last year, but total revenues for the first two months of the year are up 13.6 percent.
This is being used by Gov. Glenn Youngkin to buttress support for campaign-promised tax cuts.
“This revenue report supports the mid-session forecast, and reinforces the need for us to cut costs on families and strengthen Virginia,” Gov. Glenn Youngkin said. “We have strong revenue forecasts that can fund tax cuts. With the highest gas prices on record and the highest inflation rates in decades, we have to provide relief for Virginians, and we have the revenues to do it now.”
Collections of payroll withholding taxes decreased 1.3 percent in February. Collections of sales and use taxes, reflecting January sales, rose 7.9 percent in February. February receipts include January post-holiday sales and gift card purchases, completing the holiday shopping season, however the severe winter weather could have delayed some purchases.
The main tax return filing season began in February; the Department of Taxation issued $280.1 million in refunds compared with $217.0 million in February of last year. Through February, 595,000 refunds were processed compared with 486,000 last year.
On a year-to-date basis, collections of payroll withholding taxes – 56 percent of General Fund revenues – increased 9.7 percent ahead of the annual forecast of 9.0 percent growth. Sales tax collections – 17 percent of General Fund revenues – increased 14.8 percent through February, ahead of the annual forecast calling for an 11.4 percent increase.
Recordation taxes advanced 0.5 percent on a fiscal-year-basis, ahead of the 4.3 percent decline in the annual forecast. Total revenues rose 13.6 percent through February, ahead of the annual forecast of 9.2 percent growth.
The full February 2022 revenue report is available here.
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Chris Graham
