Puerto Rico's December revenues came in 7% short of budgeted projections.
While Puerto Rico had anticipated $918 million in General Fund net revenues, it instead received $854 million, the Commonwealth's Treasury Department said in a press release Jan. 20.
The categories with the biggest shortfalls were individual income taxes, foreign corporation excise taxes, and "other taxes." The shortfalls were $61.2 million, $48.1 million and $22.3 million, respectively. The category that had the biggest excess over the budgeted total was corporate income taxes at $46.9 million.
Puerto Rico Treasury Secretary Juan Zaragoza G-mez said individual income tax collections were temporarily hurt by a law passed on Dec. 22, 2014. This law extended the period taxpayers could prepay certain transactions associated with Individual Retirement Accounts, retirement plans and other capital assets.
The government originally expected to collect $40 million from these prepayments. The law extended prepayment to Jan. 31, and the Treasury now expects much of the extra revenue to arrive in January rather than December.
The Treasury said there were two main reasons for the foreign corporation excise tax shortfall.
First, in 2013 one corporation reached the maximum cap for the excise tax in a calendar year in December. This year it reached the cap in late October and the corporation made no payments in December.
Second, another corporation made payments last year that were not recurrent this year.
Through the first half of the fiscal year, General Fund net revenues came in 2.5%, or $96.5 million, short of budget. Motor vehicle and foreign excise taxes had the biggest shortfalls at $51.5 million and $42.2 million, respectively.
In better revenue news, Puerto Rico's sales and use tax revenues increased 3.5% for December from a year earlier and 6.3% in the first half of the fiscal year compared with the same period of the last fiscal year, according to the Treasury.
In the early part of the fiscal year these revenues are fed through the Puerto Rico Sales Tax Financing Corp., COFINA, to support COFINA bonds. For the first time, in the current fiscal year the transfer was completed in December rather than in January. During the rest of the fiscal year, sales and use tax revenues will contribute to the General Fund.
