December 2014 General Fund Revenue Collections Up 13.1% From The Previous Year And Fiscal-Year-To-Date Collections up 6.8%
~The Gain was Driven by Solid Underlying Growth in Withholding and an Extra Deposit Day~
RICHMOND – Governor McAuliffe announced today that December revenue collections posted strong gains. General Fund revenue increased 13.1 percent from the previous year, mainly driven by solid underlying growth in payroll withholding, further boosted by an extra deposit day. On a fiscal year-to-date basis, total revenue collections rose 6.8 percent, well ahead of the revised annual forecast of 3.1 percent growth. The main drivers of the revenue increase were the individual income tax and the corporate income tax.
Speaking about the revenue data, Governor McAuliffe acknowledged that December revenue collections represent a strong showing even after discounting for the extra deposit day in withholding receipts. “This trend is welcome news and indicative that the Virginia economy is gradually improving,” said Governor McAuliffe. “We do still have half of a year to go, so now is not the time to let up on our efforts to diversify and build a new Virginia economy. Making Virginia less dependent on the federal government is a long term goal that must guide our thinking and our endeavors if we are to continue to make economic progress in the future.”
With one more deposit day compared with last year, collections of payroll withholding taxes rose 15.1 percent in December. Nonwithholding increased 39.5 percent, however a clearer assessment of growth in this source will not be possible until the end of January, when all quarterly payments have been received. December and January are significant months for collections in nonwithholding as receipts can be distorted by the timing of payments. Taxpayers have until January 15 to submit their fourth estimated payment for tax year 2014 and some of these payments are usually received in December.
Collections of sales and use taxes, reflecting November sales, fell 1.0 percent in December, however, this month represents just the start of the holiday shopping season. December sales tax collections are due January 20th and will provide a more complete picture of the holiday shopping season.
December is also a significant month for corporate income tax collections as quarterly estimated payments are due for most corporations. Collections of corporate income taxes were $166.4 million in December, compared with receipts of $135.4 million a year ago, a 22.9 percent increase.
Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $28.8 million in December, compared with $25.7 million in December of last year for growth of 12.1 percent.
On a year-to-date basis, collections of payroll withholding taxes – 64 percent of General Fund revenues -- increased 6.2 percent, ahead of the revised annual forecast of 2.9 percent growth. Year-to-date nonwithholding collections increased by 19.3 percent and ahead of the annual estimate of 6.3 percent growth. Sales tax collections - 19 percent of General Fund revenues – increased 3.0 percent through December, behind the annual forecast calling for a 4.3 percent increase. Through the first half of the fiscal year, corporate income tax collections have grown 20.8 percent from the same period last year, ahead of the annual estimate of a 0.1 percent increase.
Adjusting for the accelerated sales tax program and the 0.1 percent sales tax transfer to transportation required by the provisions of HB 2313, total revenues are up 6.8 percent through December, ahead of the adjusted forecast of 3.0 percent growth.
Read the full report here.