|Budget Issue:||Weak final collection day--April income taxes likely $250 million above projection|
|Finding or Recommendation:||Provides final update on preliminary daily agency cash reports of April 2011 personal and corporate income tax collections, net of refunds.|
(Following the release of this item, a later update, reflecting the Franchise Tax Board's preliminary monthly tally of April income tax receipts, was posted on our web site.)
This updates yesterday's Legislative Analyst's Office (LAO) commentary on month-to-date daily personal income tax (PIT) and corporation tax (CT) collections during April 2011. (Collectively, the PIT and CT are the state's "income taxes.") This will be our final update prior to the Franchise Tax Board's (FTB) release of its preliminary April income tax collection tally a few days from now. As discussed in yesterday's commentary, the totals tabulated below will change to some extent as tax agency officials update and reconcile records in the coming days and weeks. The LAO tally or any other daily tally of April state revenues, therefore, should be regarded as tentative and preliminary for now.
Personal Income Taxes. Net FTB PIT collections reported today were $52 million. This takes the month-to-date total for net FTB PIT collections to $4.454 billion. Today's final day of April PIT refunds has yet to be included in this total. It seems, likely, therefore, that the month of April will end with net FTB PIT collections of about $4.4 billion. This likely will be about $50 million above the administration's projection for non-withholding PIT collections during April. As mentioned yesterday, April PIT withholding (administered by the Employment Development Department) appears on track to end the month about $250 million above the administration's projection. Accordingly, total April net PIT collections seem on track to be about $300 million above the administration's projection.
Corporation Taxes. Today was a very weak final collection day in April for CT. Net CT collections were just $2.3 million, which takes the month-to-date total for April reported by FTB to $1.484 billion. One refund day remains to be included in this total. For the entire month, the administration projected that net CT collections would be $1.532 billion. Accordingly, it appears the state might end April with CT collections about $50 million below the administration's projections.
Bottom Line. Our best estimate right now is that April income taxes will end about $250 million above the administration's projections for the month--up $300 million in net PIT collections and down $50 million in CT collections. These totals do not include sales and use taxes. Preliminary tallies from FTB and from the Board of Equalization on income taxes and sales and use taxes, respectively, are expected in the coming days.
Methodology. The daily tax agency collection reports upon which this update is based are "agency cash" reports. Agency cash—not "Controller's cash"—is used for state budgetary forecasting and reporting purposes. Agency cash differs from Controller's cash (which is reported in monthly state cash flow statements and the State Controller's Office personal income tax daily revenue tracker) based principally on the timing of receipts.