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RICHMOND—Governor Ralph Northam today announced that January General Fund revenues fell 2.4 percent from the previous year.
“As we work to put this pandemic behind us, we must stay focused on positioning our Commonwealth for broad-based and inclusive growth,” said Governor Northam. “Our revenue picture remains stable, and I am confident that we can strengthen our cash reserves, provide Virginia families and businesses with the relief they need to get back on their feet, and meet our budget priorities, which includes giving our teachers a pay raise.”
Collections of payroll withholding taxes fell 12.6 percent for the month, which was expected due to one less deposit day in January relative to a year-ago. Collections of sales and use taxes, reflecting December sales, rose 5.6 percent in January. The combined December and January receipts, representing the bulk of the holiday shopping season, was 5.4 percent above the same period last year.
“Collections have been strong for the first seven months of the fiscal year, especially in individual estimated payments, sales and use taxes, corporate income tax, and recordation taxes,” said Secretary of Finance Aubrey Layne. “Besides the normal monthly payroll withholding and sales tax collections, estimated payments from individuals are due in January, making it a significant month for revenue collections.”
December and January are significant months for collections of nonwithholding and receipts can be distorted by the timing of payments. Taxpayers had until January 15 to submit their fourth estimated payment for tax year 2020 and some of these payments are received in December. Receipts of nonwithholding for the two-month period of January-December increased 14.7 percent from last year. Collections of corporate income taxes were $49.3 million in January, compared with receipts of $29.8 million in January of last year.
On a fiscal year-to-date basis, total revenue collections rose 6.0 percent through January, ahead of the forecasted 1.2 percent growth. Year-to-date, withholding collections are 0.3 percent ahead of the same period last year, but below the annual estimate of 2.7 percent growth. On a year-to-date basis, sales tax collections have risen 6.5 percent, well ahead of the annual estimate of a 2.6 percent decline. Nonwithholding collections for the first seven months of the fiscal year grew 28.5 percent, ahead of the annual estimate of a 4.4 percent increase. On a fiscal year-to-date basis, corporate income tax collections rose 39.3 percent through January, ahead of the annual forecast of 19.9 percent growth.
The full report is available here.
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