December revenue offers mixed results

January 13, 2012

Georgia’s December 2011 revenue performance was mixed compared to December 2010. Sales tax collections continued their solid growth with net revenue growing 7.5 percent. This was the 18th month of positive growth in sales tax revenues out of the last 19 months. In contrast, individual income tax and corporate income tax revenues fell compared to December 2010. However, December 2010 revenues for both taxes were exceptionally high due to large audit settlement payments received in December 2010. These payments result from settlement of disputes between the taxpayers and the Department of Revenue and typically represent taxes owed over a multi-year period along with any penalties and interest.

Outside of the large settlement agreement affecting individual income tax revenues, revenue performance continues to be strong. Payments with returns have grown more than 40 percent averaged over the last three months; individual estimated payments have grown by more than 67 percent averaged over the last three months, and refund payments, a drag on net growth, are down more than 15 percent averaged over the last three months.

Corporate revenues have lagged throughout the fiscal year; however, corporate payments are heavily concentrated in the final quarter of the fiscal year so December’s performance is not necessarily indicative of future trends.

The state of Georgia’s net tax collections for the month of December totaled $1.54 billion, a decrease of $(19) million or -1.2 percent compared to December 2010. Through six months of FY2012, net revenue collections totaled $8.25 billion year-to-date, an increase of $409 million or 5.2 percent compared to YTD December FY2011.

The following changes within the various tax categories contributed to the net revenue decrease in December:
 
Individual Income Tax: Individual Income Tax collections for December totaled $846 million, down from $857 million in December 2010, for a decrease of $(11) million or -1.3 percent.

The following notable components within Individual Income Tax account for the increase:
•      Individual Income Tax Estimated payments increased $41 million or 84.7 percent
•      Individual Income Tax refunds issued (net of voided checks) were down $(9.5) million or -37.9 percent
•      Individual Withholding payments were down $(64) million or -8.0 percent
•      Individual Tax Returns and Assessments were up a combined $2.5 million

Sales and Use Tax: Net Sales and Use Tax collections for December totaled $402 million, up from $374 million in December 2010, for an increase of $28 million or 4.2 percent. The monthly Sales Tax Distribution to local governments totaled $360 million, which was an increase of $12.5 million or 3.6 percent over last year.

Corporate Income Tax: Corporate Income Tax collections for December fell by $(26) million or -17.3 percent, down from $151.5 million in December 2010. 

The following notable components within Corporate Income Tax make up the increase:
•      Corporate Tax refunds issued (net of voided checks) were down $(10.5) million or -44.6 percent
•      Corporate Income Tax Return payments declined $(26) million or -39.9 percent
•      Corporate Estimated Tax and S-Corp Tax payments were down a combined $(10.5) million

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