You knew it was coming, but even so, seeing the numbers on the impact the COVID-19 lockdown is having on the Virginia economy is … wow.
The Virginia state government’s April revenue collections fell 26.2 percent, primarily due to the extension of individual and corporate income tax deadlines until June 1 to provide relief to Virginians amid the ongoing COVID-19 pandemic, Gov. Ralph Northam announced today.
Again, wow.
“As anticipated, this is the first monthly revenue report to reflect the significant negative impacts of COVID-19 on the health of our Commonwealth’s finances,” Northam said. “We are facing an unprecedented health and economic crisis, and we must combat this virus before we can begin to repair our economy. My top priorities continue to be protecting the health and safety of all Virginians.”
April is typically a significant month for revenue collections. In addition to regular collection of withholding and sales taxes, final payments for the previous tax year 2019 and the first estimated payment for the current tax year 2020 would usually be due from corporations on April 15.
A portion of the estimated and final payments from individuals, which were due May 1, is typically received in April.
Northam deferred individual and corporate income tax payments due between April 1 and June 1, until June 1, 2020. The extension applies to taxable year 2019 final payments and extension payments, and the first estimated payment for taxable year 2020.
“In normal times, we would assess the Commonwealth’s finances during the April and May period,” said Secretary of Finance Aubrey Layne. “However, with the delay in the payment date for individual and corporate taxes until June 1, April through June receipts must be considered together to properly assess collections. April tax receipts are consistent with our estimate of a $1 billion reduction in the fourth quarter of fiscal year 2020 related the impacts of COVID-19.”
Collections of payroll withholding taxes increased 4.2 percent for the month, although calendar effects probably overstated growth. Collections of sales and use taxes, reflecting March sales, fell 0.4 percent in April.
On a year-to-date basis, collections of payroll withholding taxes—62 percent of General Fund revenues—are up 4.7 percent and match the estimate. Sales tax collections—18 percent of General Fund revenues—increased 7.4 percent and match the annual estimate. On a fiscal year-to-date basis, total revenue collections have increased 1.4 percent through April, below the annual forecast of 3.1 percent growth.
The full report is available here.
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