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RICHMOND—Governor Northam today announced that, although March is not a significant month for collections, revenue decreased 1.4 percent as payroll withholding had one less deposit day than a year ago. After revenues increased by 26.6 percent in February due to the delayed tax filing season, lower revenues were expected in March. On a fiscal year-to-date basis, total revenue collections rose 3.0 percent, behind the annual forecast of 5.9 percent growth. Although collections are lagging the annual estimate, growth is expected to be higher in the final quarter of the fiscal year due to effects of the federal Tax Cuts and Jobs Act.
“March is not a significant month for state revenue collections and this report reflects an expected dip in revenues after a delayed start to the tax processing season led to fewer refunds being issued and growth of general fund revenue in February,” said Governor Northam. “While fourth quarter collections are always highly dependent on individual estimated and final payments that are due May 1 and June 15 respectively, as we enter the fourth quarter of the fiscal year I remain encouraged by the strength of our underlying economic forecast. I thank the General Assembly for working with my administration to pass a budget that shores up our reserve fund, makes responsible investments in our long-term growth, and continues the Commonwealth’s positive economic trends.”
The last three months of the fiscal year are significant collections months. In addition to estimated and final payments from both corporations and individuals due in April and May, estimated payments are again due in June.
Collections of payroll withholding taxes grew 2.7 percent in March. Refunds were up 24.7 percent in March, totaling $486.2 million compared with $390 million issued a year ago. Collections of sales and use taxes, reflecting February sales, fell 1.1 percent in March. Wills, suits, deeds, and contracts fell 6.2 percent in March.
On a year-to-date basis, collections of payroll withholding taxes—62 percent of General Fund revenues—increased 3.3 percent ahead of the same period last year, and are below the estimate of 3.8 percent growth. Sales tax collections—17 percent of General Fund revenues—increased 3.5 percent, slightly trailing the annual estimate of 3.7 percent growth. On a fiscal year-to-date basis, total revenue collections rose 3.0 percent in March, behind the annual forecast of 5.9 percent growth.
To view the full report, click here.
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