Governor McAuliffe Announces April 2017 General Fund Revenue Collections down 3.4%; Fiscal-Year-To-Date Collections Up 3.6%
~Net individual income taxes accounted for loss, both April and May revenue must be assessed together due to timing issues~
RICHMOND- Governor McAuliffe announced today that April revenue collections fell 3.4 percent. This result was influenced by one less deposit day for payroll withholding tax collections and the timing of estimated and final personal income tax payments. On a fiscal year-to-date basis, total revenue collections rose 3.6 percent, ahead of the annual forecast of 2.9 percent growth.
“While this month’s revenue collections dropped, the timing of collections require that we consider April and May together and in the context of Virginia’s strong job market,” said Governor McAuliffe. “Revenue collections for the year-to-date remain ahead of the forecast, but we need to continue to work together to build the new Virginia economy by creating new jobs and laying a foundation for sustained economic growth for years to come.”
With one less deposit day compared to April of last year, collections of payroll withholding taxes increased 0.7 percent for the month. Collections of sales and use taxes, reflecting March sales, fell 0.3 percent in April.
April is also a significant month for personal income tax nonwithholding collections. Final payments for tax year 2016 and the first estimated payment for tax year 2017 are both due May 1. Typically, a portion of final payments due May 1 for the tax (calendar) year are received in April; however, the amount varies from year to year and estimated and final payments continue to be processed in May. Therefore, April and May collections must be analyzed together to accurately assess growth in this source.
In addition, in April, corporations made their first estimated payment for tax year 2017, and made either a final or extension payment for tax year 2016. Collections of corporate income taxes were $162.5 million in April, compared with receipts of $133.5 million in April of last year, a 21.7 percent increase.
On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues – are 4.8 percent above of the same period last year, ahead of the estimate of 3.6 percent growth. Sales tax collections – 18 percent of General Fund revenues – increased 1.3 percent, trailing the annual estimate of 2.8 percent growth. Year-to-date, nonwithholding collections are 4.2 percent below the same period last year, trailing the annual estimate of a 0.7 percent decline. On a fiscal year-to-date basis, total revenue collections have increased 3.6 percent through April, ahead of the annual forecast of 2.9 percent growth.
May and June are also significant months for general fund revenue collections. Individual estimated and final payments will continue to be processed in May and estimated payments for individuals, corporations and insurance companies are due by June 15.
Click here to view the April Revenue Letter.