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RICHMOND—Governor Ralph Northam today announced that total General Fund revenues fell 12.4 percent in February, mainly due to the on time opening of this year’s tax processing season, which resulted in twice as many refunds being issued compared with last year’s delayed opening. In addition, withholding and sales tax receipts posted solid gains for the month. On a fiscal year-to-date basis, total revenue collections rose 6.2 percent, ahead of the annual forecast of 3.2 percent growth.
“I am pleased to see this month’s revenue report continue to reflect the strong economy in Virginia,” said Governor Northam.
Collections of payroll withholding taxes increased 3.7 percent in February. Collections of sales and use taxes, reflecting January sales, rose 8.8 percent in February. February receipts include January post-holiday sales and gift card purchases, completing the holiday shopping season. The main tax return filing season began in February, and the Department of Taxation issued $427.3 million in refunds compared with $218.4 million in February of last year. This February, 940,000 refunds were processed compared with 519,000 last year. Thus, comparisons of refund activity to last year will not be appropriate until the end of March.
“This month provided no surprises as we were well aware that the month would be down due to returning to normal individual refund processing operations,” said Secretary of Finance Aubrey Layne. “The key to the general fund revenue forecast remains the fourth quarter when individual final payments are due on May 1.”
On a year-to-date basis, collections of payroll withholding taxes—62 percent of General Fund revenues—increased 5.5 percent ahead of the annual forecast of 4.7 percent growth. Sales tax collections—17 percent of General Fund revenues—increased 8.5 percent through February, ahead of the annual forecast calling for a 7.4 percent increase. Total revenues rose 6.2 percent through February, ahead of the annual forecast of 3.2 percent growth.
The full report is available here.
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