April state revenues totaled $1.7 billion with a gain over 2012 of some $201.1 million for the month. This is the second largest month in five years. January and April 2013 were the highest-revenue months since 2008. So this is encouraging.
The driving force behind the increase is the growth in individual income tax collections, which includes both personal and small business tax payments. This is probably a better indicator of increased business activity, since this category includes withholding taxes tied to payrolls as well as income taxes.
Of course, the other factor this time of year is the level and amount of tax refunds since this is subtracted from collections.
The individual income tax category netted $1.01 billion for April and showed an increase of 26.1 percent over last year. Tax refunds were down from 2012 by $6.5 million and the number of refunds was down by 43,271. Apparently, a reporting change in extension payments caused at least part of the large increase in the total.
Sales taxes begin to be affected by title fee initiation
The sales tax category has been lethargic for this entire fiscal year, growing only 1.2 percent in gross sales taxes through March. So, as the new tag/title fee takes effect replacing sales taxes on new automobiles, this category is starting to slide and in April showed a net decline of $65.6 million or -13.6 percent. Motor vehicle tag, title and fees showed an increase of $21.8 million or 85.6 percent.
Motor fuel tax collections continued to slide under higher retail prices showing a negative $2.3 million for April or -2.8 percent.
Corporate income tax collections again were a bright spot, hopefully pointing toward more profitable times for Georgia corporations. April was another positive month, showing a $50.3 million increase or a positive 73.9 percent.
Tobacco and alcoholic beverages continued negative numbers at -10.9 percent and -8.2 percent, respectively.
Year-to-date number point to a surplus
If our dreams came true for the FY13 year, they would probably call for a surplus at the end of June that adds substantially to the revenue shortfall reserve or “rainy day fund.” Unless there is some unforeseen shortfall in May or June’s revenues, it appears that the state will meet its budget requirements and have a fair amount to add to the state’s reserve fund.
So far through April, state revenues stand at $14.076 billion or an increase of $808.369 million or 6.1 percent. While payments and refunds through tax season and the accounting for these can shift the numbers down, it still appears that this fiscal year will end on a high note.
Individual income tax collections stand at $7.3 billion, a gain of $562.7 million or a healthy 8.3 percent.
Sales taxes, which will be fluctuating with the title fee process growing, only show a 0.9 percent increase in net sales taxes for the year, or $38.4 million.
Motor fuel taxes are negative for the year netting just over $800 million at this point but showing a 3.8 percent decrease under 2012 through April.
This will go down as the most successful year for corporate tax revenues in a long while with an increase of $185.9 million, year to date, or an increase of 43.4 percent. That’s almost a quarter of the net revenue gain for the year and is over four times the sales tax increase.
Tobacco and cigar taxes are negative YTD at -3.8 percent, but the alcoholic beverages category is slightly positive at 0.7 percent.
So there is plenty to be thankful for this month and we will keep our fingers crossed for May and June numbers.