July collections miss mark, but up from last year’s numbers

 8/3/2017

​CHARLESTON, W.VA. – The West Virginia Department of Revenue today released General Revenue Fund collections for July of nearly $252.8 million that missed estimates by $2.9 million, but were more than 12 percent above last year’s receipts.
 
The increase from last year was attributable to a $11.7 million increase in monthly Personal Income Tax collections and sizeable increases from the prior year for collections of Insurance Premium Tax (up 21 percent), Tobacco Excise Tax (up 26 percent), B&O Tax (up 61 percent) and Severance Tax (up 82 percent).
 
Highlights of the major revenue components accounting for nearly all revenue collections include:
 
  • Personal Income Tax collections of $128.1 million were $9.7 million above estimate and 10.1 percent above of prior year receipts. The gain in net revenue from the prior year was due to higher-than-expected withholding tax receipts. Income withholding tax payments of $124.6 million were 15.6 percent above prior year receipts and reflect a combination of improving wage and employment growth as well as significant revenue timing alterations from the prior year. The huge gain in withholding tax receipts was partially offset by a 32 percent increase in monthly tax refund payments from the prior year.   
 
  • Consumer Sales and Use Tax collections of $65.3 million were $4.9 million below estimate just 1 percent above prior year receipts. Overall collection growth was 5.4 percent for the month over a very weak collection performance level in July of the prior year. However, growth in General Revenue Fund collections was just 1 percent mainly due to the impact of the quarterly municipal sales tax transfer. Due to greater municipal participation in the local sales tax program, the quarterly local tax distribution totaled roughly $18.2 million, an increase of nearly $6.4 million over the prior year. The amount of net change in receipts for the State as reflected by the local tax distribution was a negative $12.2 million for the month. In addition to the quarterly local sales tax distribution, there are other sizeable revenue transfers each July.
 
  • Per statutory requirements, the state annually transfers a lump sum of sales tax collections to the Department of Highways in July equal to 6 percent of 40 percent of the total value of executed contracts in the prior fiscal year. The transfer in July of this year was nearly $11.3 million.
 
  • The monthly revenue transfers to the School Building Authority jumped 14 percent above last year to nearly $2.7 million.      
 
  • General Revenue Fund Severance Tax collections of -$3.5 million were $7.9 million below estimate due to lower-than-expected collections. The net number reflects the payment of two separate quarterly local coal severance tax distributions totaling $9.7 million. In addition, another $19.4 million was deposited in the Infrastructure Bond Fund during the month. Total net state and local severance tax collections for the month were roughly $25.6 million. Collections exceeded prior year receipts by more than 82 percent.
 
  • Tobacco Products collections totaled $17.0 million in July. July receipts exceeded estimate by $4.4 million and prior year collections by 26 percent. The jump in July revenues was largely due to timing of receipts with some collections possibly coming at the expense of anticipated collections in August.
 
  • Business and Occupation Tax collections of nearly $9.0 million were roughly $0.6 million below estimate, but more than 61 percent ahead of last year due to a more favorable month end collection date this year.
 
  • Insurance Premium Tax of $26.8 million were $1.8 million above estimate and 21 percent ahead of last year due to a more favorable month-end collection date this year. A portion of the surplus may come at the expense of anticipated August collections.
 
Total State Road Fund collections of nearly $73.6 were $3.4 million above estimate and 27.6 percent above prior year receipts last month. The increase in tax collections from the prior year was led by a timing related 34.8 percent rise in Motor Fuel Excise Tax collections that included a larger-than-expected carryover from June of last fiscal year to this year. In addition, higher registration and license fees imposed at the beginning of July contributed to a 62.8% increase in collections from those sources. Revenue gains associated with recently enacted tax rate increases to both the Motor Vehicle Sales Tax and the Motor Fuel Excise Tax should begin accruing in August.


Contact Information

Lalena Price, Communications Director | 304.558.1017 | Lalena.D.Price@wv.gov