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Solid Gains Occurred in Net Individual Income Tax and the Insurance Premiums Tax
RICHMOND- Governor McAuliffe announced today that general fund revenue collections increased 10.0 percent in April, with solid gains in individual withholding and nonwithholding as well as in the insurance premiums tax. On a year-to-date basis, total revenue collections were up 1.3 percent through April, slightly ahead of the annual forecast of 1.0 percent growth.
“April is generally a significant month for revenue collections, said Governor McAuliffe. “The revenue data being released today represent a step in the right direction.”
May will be a critical month since individual income tax returns are due May 1. In addition, a significant amount of May’s payments are from upper income individuals where a significant portion of their income is based on capital gains. Recent news from states across the nation that have April 15th filing deadlines indicate some disappointing news about non-withholding collections as the uncertainty arising from the federal Fiscal Cliff tax policy negotiations in the December 2012/January 2013 timeframe appears to have shifted more capital gains from 2013 into 2012 than otherwise would be the case. As a result, we must be cautious and continue our efforts to place a priority on creating jobs and diversifying our economy.
Collections of payroll withholding taxes grew 8.0 percent in April, due to an extra deposit day compared with April 2013. A significant month for individual nonwithholding and corporate income tax collections, these sources increased respectively by 15.0 percent and 0.4 percent. The first estimated payment from insurance companies for tax year 2014 was due in April. The insurance premiums tax totaled $113.8 million and increased by 11.0 percent. Collections of sales and use taxes, reflecting March sales, fell 5.0 percent in April. Finally, recordation taxes from real estate transactions were down 19.9 percent as home sales remained weak.
On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 3.3 percent, ahead of the annual forecast of 2.9 percent growth. Sales tax collections - 18 percent of General Fund revenues – have declined 4.8 percent through April, trailing the annual forecast calling for a 4.4 percent decline. Adjusting for the accelerated sales tax program and the 0.125 percent sales tax transfer required by the provisions of HB 2313, total revenues grew 2.2 percent through April, slightly ahead of the adjusted forecast of 2.1 percent growth.