Virginia sees 27% increase in April's revenue collections
Virginia’s revenue collections in April increased 27.4% over April 2018, according to Gov. Ralph Northam.
For the fiscal year, total revenue collections have risen 6.2%, and are ahead of the state’s forecast for the year, which predicts 5.9% growth in general fund revenues.
“This is the first month of the all-important fourth quarter of the fiscal year, and I am pleased with the strong results,” Northam said. “While the individual estimated and final payments that were due May 1 still need to be processed, we are currently on track to allow supplemental individual refund checks to go out later this fall as specified in the enacted budget.”
The state will send out refunds of $110 for individuals and $220 for couples, in addition to what they received on their 2018 income tax refunds. The tax relief is part of the package that conformed Virginia’s tax code to federal law. Lawmakers also passed legislation designed to prevent taxpayers from paying more on their 2018 income taxes as a result of the 2017 Tax Cuts and Jobs Act.
As for April’s positive revenue collections, the state said various factors could be influencing the results, including the fact that there was another deposit day compared to April of last year. Collections of payroll withholding taxes increased 7.4% for the month, while collections of sales and use taxes grew by 2.9%.
April is also a “significant month” for non-withholding collections,” state officials said.
Final payments for the 2018 tax year and the first estimated payment for the 2019 tax year are both due May 1. Typically, a portion of final payments due May 1 for calendar year 2018 are received in April, however, the amount varies from year to year.
Estimated and final payments will continue to be processed in May, state officials said, adding that April and May collections must be analyzed together to accurately assess growth in this revenue source.
Non-withholding payments in April were $1.2 billion, 40.3% above last year’s payments.
Corporations also made their first estimated payment for the 2019 tax year. Corporate income tax payments were $272.3 million in April, compared with $181 million in April of last year, a 50.4% increase. Both non-withholding and corporate sources are up in part due to the federal Tax Cuts and Jobs Act changes.
For the fiscal year, collections of payroll withholding taxes, which are 62% of general fund revenues, are 3.7% above the same period last year, and are close to the estimate of 3.8% growth.
Sales tax collections, 17% of general fund revenues, increased 3.4%, and are slightly behind the forecast of 3.7% growth.
Total annual non-withholding collections are 6.7% above the same period last year, and are behind the annual prediction that there would be a 15.2% gain in the category. Year-to-date corporate income tax collections are up 13.8%, and ahead of the annual forecast of 5.6%.
April is the second month this year that Virginia has seen double-digit growth in general fund revenues, although collections were much lower the other two months. February’s revenues were up 26.6% compared to the same month in 2018.
January’s collections were only up 0.4%, while March slipped with a 1.4% decrease in revenues compared to 2018. Despite those results, total fiscal year collections were still ahead of last year by 1.3% in January and 3% in March.