Showing posts with label Withholding tax. Show all posts
Showing posts with label Withholding tax. Show all posts

Friday, October 17, 2014

September 2014 General Fund Revenue Collections Up 5.3% From Previous Year Fiscal-Year-To-Date Collections up 6.7%

English:
English: (Photo credit: Wikipedia)
All Major Sources Accounted for the Gain

RICHMOND - Today, Governor McAuliffe announced that the September General Fund revenue increased 5.3% from the previous year with all major sources contributing to the increase.  This is the first time revenues have increased for three consecutive months since April-June of 2013.  The Governor also stated that September completes the first quarter of fiscal year 2015 and is a significant month for revenue collections. Estimated payments from individuals, corporations, and insurance companies are all due in September, along with regular monthly collections in withholding, sales taxes, and other sources.
“I am pleased to see that our revenue collections are up, however, we must remain cautious because the Commonwealth has only collected about one-quarter of its general fund revenue estimate to date. My administration will continue to take a prudent approach to help ensure that Virginia remains fiscally strong,” said Governor McAuliffe.
On a fiscal year-to-date basis, total revenue collections rose 6.7%, 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 an additional deposit day compared with last year, collections of payroll withholding taxes rose 8.3% in September. September is a significant month for collections in non-withholding, since the first estimated payment for fiscal year 2015 is due.  Collections rose 2.8% in September from last year.  Collections of sales and use taxes, reflecting August sales, rose 3.5% in September. As with non-withholding, September is a significant month in corporate income tax collections, since the first estimated payment for the fiscal year is due in September.  Collections of corporate income tax grew 6.9% in September from September of last year.  Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $26.4 million in September, compared with $25.9 million in September of last year.  The 1.9% growth in September ended 13 consecutive months of negative growth. 
On a year-to-date basis, collections of payroll withholding taxes – 64% of General Fund revenues -- increased 6.3%, ahead of the revised annual forecast of 2.7% growth.  Year-to-date non-withholding collections were $427.7 million compared with $372.8 million in the same period last year, rising by 14.7% and ahead of the annual estimate of 6.3% growth.  Sales tax collections – 19% of General Fund revenues – increased 4.6% through September, ahead of the annual forecast calling for a 4.4% increase.  Through the first quarter of the fiscal year, corporate income tax collections have grown 12.4% from the same period last year, ahead of the annual estimate of a 0.9% decline.

Read the full report here.


Thursday, July 17, 2014

Fiscal Year 2014 General Fund Revenue Collections Down 1.6% From Fiscal Year 2013 And $439 Million Below Forecast

The Timing of Nonwithholding Payments in Response to Federal Budget 
Uncertainty Drives the Shortfall

RICHMOND- Governor McAuliffe announced  that preliminary figures indicate the state concluded Fiscal Year (FY) 2014 with an approximately $438.5 million shortfall in general fund revenue collections, excluding transfers.

Total general fund revenue collections declined by 1.6 percent in FY 2014, behind the revised revenue forecast of 1.0 percent growth. This marks the first time that Virginia revenues have declined outside of a national recession. 

The main driver of the revenue decrease was a large drop in nonwithholding payments.  Despite record-breaking increases in the stock market, it appears that the uncertainty about the federal Fiscal Cliff in December 2012/January 2013 shifted more realized capital gains from 2013 into 2012 than expected.  Revenue collections during the last quarter of each fiscal year are significant in this regard because upper income individuals who have a significant portion of their income based on capital gains pay a substantial portion of their tax liability in the April to June period.

A comprehensive breakdown of the preliminary FY 2014 revenue shortfall is shown below.  The final FY 2014 tally will not be available until mid-August. 

Analysis of Fiscal Year 2014 Revenues
Based on Preliminary Data
  • Total general fund revenue collections fell short of the official forecast by $438.5 million (-2.7 percent variance).
    • Total general fund revenues declined 1.6 percent compared with the forecast of 1.0 percent growth.
  • The revenue shortfall is primarily due to a large drop in individual nonwithholding collections. That source, which is made up on non-wage income (mainly capital gains), was $401.1 million off the mark.
  • Payroll withholding and sales tax collections, 83 percent of total revenues and the best indicator of current economic activity in the Commonwealth, also fell short of the forecast by $78.9 million, a forecast variance of -0.6 percent.
    • Estimates for these two sources are directly tied to the economic outlook developed during the fall forecasting process, and specifically, the outlook for jobs and wage income in the Commonwealth.
    • The general weakness in withholding and sales tax collections over the last several quarters is indicative of the negative effect that federal government spending cuts are having on the Commonwealth.
ADDITIONAL DETAILS
  • Individual income tax withholding, 64 percent of total general fund revenues, was below the estimate by $66.0 million (-0.6 percent variance).
    • Annual collections increased 2.3 percent compared with the forecast of a 2.9 percent increase.
  • Individual income tax nonwithholding collections, 15 percent of total revenues, fell 10.1 percent in fiscal year 2014 reversing the 19.1 percent gain in FY 2013, despite a record-level stock market increase in both years. Total nonwithholding collections fell short of the annual estimate by $401.1 million (-14.3 percent variance).
  • Individual refunds finished $51.3 million (-3.0 percent variance) below the annual estimate, a net positive for the Commonwealth.
  • Taken together, withholding, nonwithholding, and refunds, i.e. net individual income taxes, fell 0.8 percent, behind the annual forecast by $415.7 million, a forecast variance of 3.7 percent.
  • Sales and use tax collections, 19 percent of total revenues, fell short of the annual estimate by $12.9 million (-0.4 percent variance).
  • Corporate income tax collections, 5 percent of total revenues and one of the most volatile revenue sources, declined by 4.9 percent, compared with the forecast of a 3.4 percent decline.
  • Wills, Suits, Deeds, and Contracts (primarily recordation tax collections), 2 percent of total revenues, finished the year $66.7 million (-17.7 percent variance) behind the annual projection of no growth.
Insurance premiums tax, 2 percent of total revenues, exceeded the annual estimate by $31.0 million (11.8 percent variance).

Our Notes;  Glad to see the economic recovery is in full swing.  ????

Tuesday, June 17, 2014

General Fund Revenue Collections Declined by 20.7% in May – The Biggest One Month Decline in 13 Years

This image depicts the total tax revenue (not ...
This image depicts the total tax revenue (not adjusted for inflation) for the U.S. federal government from 1980 to 2009 compared to the amount of revenue coming from individual income taxes. The data comes from the Office of Management and Budget's record of the 'Budget of the US Government FY 2011', specifically the 'Historical Tables, Table 2.1.' The information is also here. (Photo credit: Wikipedia)
Significant Decline Occurred in Individual Income Tax Payments

RICHMOND- Governor McAuliffe announced today that general fund revenue collections decreased by 20.7 percent in May, with large declines in individual nonwithholding, the corporate income tax, and the tax on wills, suits, deeds, and contracts (recordation tax).  On a year-to-date basis, total revenue collections were down 1.6 percent through May, behind the annual forecast of 1.0 percent growth. 

Speaking about this news, Governor McAuliffe noted that “May is a significant month for general fund revenue collections since individual income tax returns for income earned in 2013 are due May 1.  A significant amount of May’s collections are also from upper income individuals where a significant portion of their income is based on capital gains.  It now appears that the uncertainty of federal tax policy resulting Fiscal Cliff in December 2012/January 2013 shifted more capital gains from 2013 into 2012 than expected, lowering the amount of capital gains that would otherwise be realized in 2013.  Accordingly, Virginia like many other states that have income taxes are now seeing declining revenues from capital gains.” 

As for other sources of revenue, collections of payroll withholding taxes fell 5.4 percent in May, due to one less deposit day compared with May 2013.  Corporate income tax collections decreased by  33.2 percent from last year.  Collections of sales and use taxes, reflecting April sales, fell 1.6 percent in May. Finally, recordation taxes from real estate transactions were down 27.3 percent as home sales and refinancing activity remained weak. 

On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 2.5 percent, behind the annual forecast of 2.9 percent growth.  Sales tax collections - 18 percent of General Fund revenues – have declined 4.5 percent through May, trailing the annual forecast calling for a 4.4 percent decline.  Adjusting for the accelerated sales tax program and the tax policy changes, included in last year’s transportation funding legislation, total revenues are down 0.6 percent through May, behind the adjusted forecast of 2.1 percent growth. 

Wednesday, May 21, 2014

General Fund Revenue Collections Increased 10.0% in April

English:
English: (Photo credit: Wikipedia)
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. 
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Tuesday, April 15, 2014

General Fund Revenue Collections Increased 7.8% in March

An assortment of United States coins, includin...
An assortment of United States coins, including quarters, dimes, nickels and pennies. (Photo credit: Wikipedia)
Solid Gains Occurred in Individual Nonwithholding, Corporate Income Tax and the Insurance Premiums Tax

 RICHMOND- Governor McAuliffe announced today that general fund revenue collections increased 7.8 percent in March, with solid gains in individual nonwithholding, corporate income tax and the insurance premiums tax.  On a year-to-date basis, total revenue collections were flat through March, lagging the annual forecast of 1.0 percent growth. 

Speaking about this news, Governor McAuliffe noted that March is not a significant month for revenue collections, in general.  However, he added “March revenues reverse the negatives of the last two months and have us now moving in the right direction.  From the very beginning of our budget deliberations, all involved have assumed that general fund revenue collections in the last quarter of fiscal year 2014, especially estimated and final payments of individual income taxes, would be key for the Commonwealth.  The revenue data for March, being released today, represent a step in the right direction toward realizing our budget estimates.  Longer term, we must continue to place a priority on creating jobs and diversifying our economy.  This is my highest objective and I will work diligently toward that end.”

Collections of payroll withholding taxes grew 0.8 percent in March.  Although not a significant month for individual nonwithholding and corporate income tax collections, these sources increased respectively by 17.7 percent and 35.1 percent.  Final payments from insurance companies for tax year 2013 were due in March.  The insurance premiums tax totaled $31.6 million and increased by 126.5 percent.  Collections of sales and use taxes, reflecting February sales, fell 4.2 percent in March – the weakness is due in part to the weather.  Finally, recordation taxes from real estate transactions were down 29.9 percent as severe winter weather dampened home sales. 

Collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 2.7 percent through March, slightly behind the annual forecast of 2.9 percent growth.  Sales tax collections - 18 percent of General Fund revenues – have declined 4.8 percent through March, 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 1.1 percent through March, trailing the adjusted forecast of 2.1 percent growth. 
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Thursday, March 13, 2014

Governor McAuliffe Announces Revenue Collections Declined 3.4% in February

An assortment of United States coins, includin...
 (Photo credit: Wikipedia)
A Solid Gain in Withholding was Offset by Subpar Collections of the Sales and Insurance Premiums Taxes

RICHMOND- Governor McAuliffe today announced that state general fund revenue collections declined 3.4% in February.  There was a solid gain in individual income tax withholding but that was offset by declines in retail sales, insurance premiums tax and recordation taxes. The Governor noted that February is not generally a significant month for revenue collections and percentages can vary accordingly. 
Collections of payroll withholding taxes grew a solid 6.6 percent in February.  Collections of sales and use taxes, reflecting January sales, fell 12.7 percent in February.  The first significant snow storms since December 2010 occurred in January probably affecting sales tax receipts due in February. Also, the State Corporation Commission issued insurance companies refunds in February this year versus in January of 2013, distorting total monthly revenues.  Finally, recordation taxes from real estate transactions were down 38.4 percent, as severe winter weather dampened home sales. 
Speaking to the revenue trend, Governor McAuliffe said that withholding receipts posted a solid gain, perhaps reflecting more positive news on the labor market front.  However, he noted that the weak sales tax performance was probably influenced by the severe weather conditions this winter.  The Governor further indicated that going forward much will depend on final income tax payments due on or before May 1.  “My goal is to keep job creation up” he said.  “If that happens, I am hopeful that other variables such as sales tax collections will improve.”
On a year-to-date basis, total revenue collections fell 0.8 percent through February, lagging the midsession annual forecast of 1.0 percent growth.  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 0.3 percent through February, trailing the adjusted forecast of 2.1 percent growth.  Collections of payroll withholding taxes – 63 percent of General Fund revenues – increased 3.0 percent, slightly ahead of the midsession annual forecast of 2.9 percent growth.  Sales tax collections – 18 percent of General Fund revenues – have declined 4.9 percent, slightly trailing the annual forecast calling for a 4.4 percent decline.  
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