|Budget Issue:||April state sales taxes $302 million above projections...gain may be temporary|
|Finding or Recommendation:||Provides update on April 2011 sales and use tax collections, as well as overall "Big Three" state tax revenue collections for the fiscal year to date.|
We have received the State Board of Equalization (BOE) estimated tally of state sales and use tax (SUT) revenues for April 2011.
SUT $302 Million Above Forecast for April—Timing Issues May Make This Gain Temporary. In its January 2011 forecast, the administration projected that there would be $1.605 billion of SUT collections in April 2011. The BOE now estimates that April collections were $1.907 billion—$302 million above the administration’s monthly projection. This April, the last day of the month — a return date for some SUT filers— was on a Saturday, and this can make projections concerning monthly collections difficult. Some filers will wait until the following Monday to file, while others will file a bit earlier than the due date. Accordingly, at this time, it remains possible that much of the overage for April could be timing-related and indirectly result in a falloff in May collections, relative to projections.
For the fiscal year to date, estimated SUT collections total $21.654 billion, or $225 million above the year-to-date forecast from the administration. Assuming that a large portion of the April overage is timing-related, it is probably best to regard SUT collections as running very close to forecast at this time.
“Big Three” State Taxes Now $2.5 Billion Above Forecast for the Fiscal Year to Date . Net personal and corporate income taxes are running $2.319 billion above the administration’s projections for the fiscal year to date, as we described yesterday. Including the April preliminary SUT tally above, overall “Big Three” state taxes (including personal and corporate income taxes, as well as SUT) are now $2.544 billion above the administration’s year-to-date projections.
As we approach the May Revision and the release of amended economic and revenue forecasts, we regard SUT revenues as running essentially “right on target” for the year to date, compared to administration projections. Personal income tax withholding and estimated taxes are both running strong relative to both administration and LAO forecasts, while corporation tax revenues are running somewhat weaker than the administration’s forecast (as we suspected they might when we released our February 2011 forecast).