|Budget Issue:||FTB preliminary April income tax tally confirms prior estimates|
|Finding or Recommendation:||This is a description of the preliminary April tally of personal and corporate income tax collections from the Franchise Tax Board.|
The Franchise Tax Board (FTB) preliminary tally of April 2013 personal income tax (PIT) and corporation tax (CT) collections confirms our recent estimates concerning agency cash collections for the month. For 2012-13 to date, General Fund and Education Protection Account PIT collections are running about $4.5 billion above projections, and CT collections are running $191 million above projections.
As we have noted since January, to the extent that 2012-13 state revenues end up higher than prior projections, a very large portion of this increase will be required to be allocated to schools and community colleges, given the current method of administering Proposition 98 (the state's constitutional minimum funding guarantee for these educational entities). The upcoming May Revision forecasts from our office and the administration also will include updated projections of 2013-14 state revenues.
The FTB April agency cash totals are summarized below. (These totals include the portion of PIT withholding collected by the Employment Development Department.) Tallies for April collections of sales and use taxes--the state's other major revenue source--will be provided separately in the coming days by the State Board of Equalization.
2012-13 Collections for the Fiscal Year to Date (as of April 30). As of the end of April, General Fund and Education Protection Account PIT collections for 2012-13 to date are $55.546 billion, which is $4.486 billion above the administration's most recent projection (released in January 2013) for the fiscal year to date as of April 30.
Collections During April. As we have noted for the past month, the state did not need to reach the administration's projected PIT collection totals for the month of April alone in order to remain even with the administration's PIT projections for 2012-13 to date. This is mainly because January 2013 saw PIT collections rise far above projections. For the month of April, General Fund and Education Protection Account PIT collections, net of refunds, totaled $12.769 billion, or $242 million below the estimate for April alone.
PIT withholding for April 2013 was $3.347 billion, or $250 million (8.1 percent), above withholding collected in April 2012. Estimated tax payments for the month were $1.987 billion, or $417 million (26.6 percent), above estimated tax payments in April 2012 (likely related in large part to the increase in marginal tax rates for high-income taxpayers approved as part of Proposition 30 last November). These estimated tax payments--the first payments, principally by high-income taxpayers, on their anticipated 2013 capital gains, business, and other income--were close to administration projections for the month.
2012-13 Collections for the Fiscal Year to Date (as of April 30). As we noted recently, CT projections were lowered in January to reflect weakness prior to that time in collection trends for this tax. As of April 30, CT collections for the fiscal year to date were $191 million above the administration's most recent projection (released in January 2013) for the fiscal year to date as of April 30.
Collections During April. April CT collections, net of refunds, totaled $1.407 billion, or $10 million below the administration's most recent estimate for April alone. The portion of these collections consisting of quarterly estimated payments by businesses totaled 1 percent less in April 2013 than in April 2012. (Proposition 39 changed tax provisions applicable to certain multistate and multinational companies beginning this year.)