December 2017 General Fund Revenue Collections Up 10.0% From The Previous Year And Fiscal-Year-To-Date Collections Up 5.9%
~Increased Nonwithholding Payments Drive December Gain~
RICHMOND – Governor Terry McAuliffe today announced that December General Fund revenue increased 10.0 percent from the previous year. The gain was driven by collections of nonwithholding payments. On a fiscal year-to-date basis, total revenue collections rose 5.9 percent through the first half of the fiscal year, well ahead of the annual forecast of 3.4 percent growth. Because the timing of payments in several sources at the end of the calendar year can distort growth, December and January collections should be viewed together to accurately assess growth. This is especially true for nonwithholding receipts where estimated payments are split between December and January.
Speaking to the revenue data release, Governor McAuliffe said, “December revenue collections remain strong and indicate that the Virginia economy is making substantial progress. Year-to-date collections, for the first six months of the fiscal year, are now 2.5 percent above the revised revenue estimate used in the budget. This should provide Virginia a substantial cushion as we enter the last six months of the fiscal year and underscore our continued commitment to prudence and fiscal responsibility.”
With one less deposit day than December of last year, collections of payroll withholding taxes fell 1.8 percent for the month. Collections of sales and use taxes, reflecting November sales, were flat in December. November represents the beginning of the holiday shopping season and a clearer assessment of the season will be possible after receiving December sales tax payments due in January.
December is a significant month for corporate income tax collections as quarterly estimated payments are due for most corporations. Because of recent federal legislation and administrative action by the IRS, corporations now have a seven-month filing extension for Virginia income tax purposes. With the seven-month filing extension, corporate extension returns were due in November and December this year as opposed to October and November in prior years. As a result of this timing issue and refund processing, corporate collections fell 20.3 percent in December.
Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $32.4 million in December, compared with $35.1 million in December of last year for a decline of 7.6 percent.
On a year-to-date basis, withholding collections are 3.0 percent ahead of the same period last year, but behind the revised annual estimate of 3.5 percent growth. Sales tax collections have risen 3.8 percent, ahead of the annual estimate of 3.0 percent growth. Corporate income tax collections for the first half of the fiscal year have risen 22.1 percent from the same period last year and are ahead of the annual estimate of a 5.7 percent increase. Total revenue collections rose 5.9 percent through December, ahead of the revised annual forecast of 3.4 percent growth.