June Tax Collections Offer Some Good News for Budget Writers
With nine days left in the month, June income tax collections are running $400 million over the amount expected in Gov. Jerry Brown’s revised budget released in May.
Brown’s Department of Finance predicted the Franchise Tax Board would collect $3.2 billion for the month. Through June 21, the board has logged more than $3.6 billion.
Overall, the Democratic governor plans on a total of $6.2 billion in income tax payments. Approximately $3 billion of that total is received by the Employment Development Department through withholding – the money employers deduct from employee paychecks to cover employee taxes.
Because of budget-related changes in tax payment schedules, June has become one of the state’s most significant revenue collection months. April is still the biggest month.
Prior to September 2008, estimated payments were made in quarterly payments of 25 percent.
To bring more revenue into the state’s cash-starved coffers sooner, the payment schedules were changed.
Now individuals and employers pay 30 percent of their estimated taxes for the year during the first quarter, 40 percent by June 15, nothing in September and the remaining 30 percent in December.
The June revenue estimates are based on Brown’s revised budget which predicted the state will cumulatively receive between now and the end of the next fiscal yar on June 30, 2012, some $6.6 billion more in revenue than anticipated in January.
If June collections are higher than Brown’s $6.2 billion estimate, the state’s budget hole is reduced by a like amount. If revenues fall short of expectations, the hole grows.
The Democratic governor estimated tax refund payments of $170 million for the month. Through June 21, the tax board reports nearly $196 million worth of refund requests.
Brown estimates bank and corporations tax collections of over $2.2 billion for June.
Through June 21, the tax board reports just over $2.3 billion in receipts.
Unlike income tax refunds, the $44 million in bank and corporation requests for refunds is significantly below Brown’s monthly estimate of $77 million.
Not surprisingly, the biggest one-day totals came on June 15, the filing deadline. Both income and bank and corporations taxes recorded totals of $1.2 billion for the day.
Filed under: Budget and Economy
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