Tax Time Is Also Crunch Time for the State
This month, California taxpayers will be a major determiner of how deeply state services, including support for public schools, will be cut beginning July 1.
For obvious reasons, April is the state’s biggest single month for income tax collections. Budget writers are counting on over $9.4 billion
Counting all sources of taxes – sales, income and business – nearly $12.1 billion is expected to flow into state coffers by April 30, $100 million less than the nearly $12.2 billion predicted for June.
April tax collections have a direct impact on the state’s budget shortfall, which Gov. Jerry Brown says is $9.2 billion.
The Legislative Analyst counters that the gap between revenues and spending commitments is more than $6 billion bigger primarily because of overly confidence expectations by the Democratic governor of the amount of capital gains Californians will cash out this year.
The $9.4 billion in income tax receipts the state is banking on this month is a combination of three things.
Taxes sent to the Franchise Tax Board plus taxes collected by the Employment Development Department through the tax withholding employers remove from employee paychecks minus requests for refunds.
Brown’s budget expects the tax board to receive $8.4 billion in income tax payments this month. Through the 12th, the tally stands at nearly $924 million. The bulk of receipts won’t be seen until April 17.
Brown’s budget writers also expect there to be requests for refunds of almost $2.1 billion.
So far, there are requests for just over $1 billion. Taxpayers getting money back tend to file earlier.
State Controller John Chiang keeps a daily tally of net income tax collections for April. It shows total collections less refund requests to be nearly $1.3 billion through April 11.
April is also the third largest month for bank and corporation tax collections. The budget estimates just over $1.5 billion for the month.
Through April 12, $327 million has been received but, again, the bulk of payments won’t occur until after April 17.
Filed under: Budget and Economy
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