Governor McAuliffe announced today that General Fund revenue increased 4.4% from the previous year with all major sources contributing to the increase. October is not a significant month in terms of general fund revenue collection but regular monthly collections are due in withholding, sales taxes, and most minor sources. Corporate and individual income tax extension return processing begins in October as corporate extension returns are due October 15 and individual extension returns are due November 1.
In speaking about the revenue collections, Governor McAuliffe said, “We have been blessed with good revenue performance since the beginning of this fiscal year. While I welcome this trend, I remain cautiously optimistic as much uncertainty still exists. Our continued efforts to diversify and to build a new Virginia economy are vital to our ongoing financial health and they constitute the proper course to improve the long term performance of the Virginia economy.”
On a fiscal year-to-date basis, total revenue collections rose 6.1%, well ahead of the revised annual forecast of 2.9% growth. The main drivers of the revenue increase were the individual income tax, the corporate income tax, and sales tax.
With one less deposit day compared with last year, collections of payroll withholding taxes rose 3.4% in October. October is not a significant month for collections in nonwithholding, however collections rose 12.5% in October from last year. Collections of sales and use taxes, reflecting September sales, rose 1.8% in October. October corporate income tax collections include estimated payments from corporations with a February through January fiscal year, including many retailers. Collections of corporate income taxes were down $11.8 million in October, which compares favorably with receipts of negative $17.2 million in October of last year. Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $28.9 million in October, compared with $26.4 million in October of last year for growth of 9.5%. Following 13 consecutive months of negative growth, October marked the second consecutive monthly increase in this source.
On a year-to-date basis, collections of payroll withholding taxes – 64% of General Fund revenues — increased 5.5%, ahead of the revised annual forecast of 2.7% growth. Year-to-date nonwithholding collections increased by 14.2% and ahead of the annual estimate of 6.3% growth. Sales tax collections – 19% of General Fund revenues – increased 3.8% through October, ahead of the annual forecast calling for a 4.4% increase. Through the first four months of the fiscal year, corporate income tax collections have grown 16.6% from the same period last year, ahead of the annual estimate of a 0.9% decline.
Read the full report here.