Will the State Reach Its December Income and Corporate Revenue Projections?
More than $5.7 billion in income tax collections and $1.4 billion in corporate taxes are supposed to flow into California coffers during the month of December.
So says the predictions in the state budget enacted June 30, which the Brown administration and legislative budget writers say is already $2.2 billion to $3.7 billion, respectively, short of estimates.
December is one of the state’s larger collection months. Quarterly payments of estimated taxes are due for both businesses and individual taxpayers.
April and June are the most significant revenue collection months.
Through December 22, the Franchise Tax Board reports collecting $607 million in income tax payments and $1.5 billion in bank and corporate taxes.
There are requests for income tax refunds of nearly $100 million and $145 million from corporate filers.
The net $500 million income tax receipts is not as dire as it seems, the State Controller cautions.
“A lot of the income tax comes in during the last part of the month because a larger estimated tax payment can lower the gross income during the next year,” said Jacob Roper, a spokesman for Controller John Chiang.
Additionally, a large chunk of income tax receipts are collected by the Employment Development Department in the form of withholding – the amount employers subtract from the paychecks of workers to cover their tax obligations.
The budget revenue estimates don’t breakdown how much revenue comes from estimated payments and how much from withholding.
Looking at the trend line of the tax board’s daily collections for the month, nearly $1.3 billion in corporate tax payments arrived within a day or two of the December 15 payment deadline.
Since then, the amount has tapered off sharply from $128 million on December 19 to $9.2 million on the 22nd.
Income tax collections have been climbing: $47 million on December 15 to $57 million on December 16 and $69 million on the 21st.
But with seven days left in the month, it’s still a long way to $5.7 billion.
Filed under: Budget and Economy
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