State tax revenues 'relatively OK' in December
CHARLESTON, W.Va. -- State tax collections stayed the course in December, coming in slightly above projections, Deputy Revenue Secretary Mark Muchow said Wednesday.
"We had a relatively OK December," Muchow said. "We ended up holding our own."
Overall, the state collected $363 million in taxes for the month, about $1.75 million over estimates.
At the mid-point of the 2012-13 budget year, state tax collections of $1.94 billion are $3.76 million above projections, but 0.7 percent below the same point in 2011.
Personal income tax collections jumped noticeably in December, presumably because taxpayers made payments prior to Jan. 1, over concerns that federal tax cuts would expire had Congress gone off the "fiscal cliff" on Tuesday.
Personal income tax collections for December of $152.63 million, or $10.7 million over estimates, and 9.2 percent above December 2011 collections, Muchow said.
Payroll withholding taxes also jumped 14.7 percent in December, compared to December 2011, suggesting an upsurge in end-of-year bonuses and perhaps also, in severance payments for end-of-year layoffs and job reductions, Muchow said.
"Somebody got some additional income that was withheld in December," he said.
Sales tax collections of $98.5 million was about $1 million below estimates - but that was caused by a $6.4 million transfer of sales tax revenue to the Division of Highways in December, Muchow said.
Adjusted sales tax collections were down about 1.3 percent compared to December 2011, a decline attributed to the reduction on the sales tax on groceries of 1 percent that went into effect on July 1, 2012, he said. As of this July 1, the sales tax on groceries will be eliminated entirely.
Because sales tax collections are based on retail sales from the previous month, the December figure includes holiday shopping in November, including "Black Friday" sales.
While Congress averted the "fiscal cliff" on Tuesday, a temporary reduction in federal payroll taxes expired on Dec. 31, which will effectively amount to a 2 percent reduction in workers' paychecks, Muchow said.
That could affect consumer spending, possibly hurting sales tax collections in coming months, he said.
Corporate net income and business franchise taxes came in $1.6 million above estimates, at $42.4 million, Muchow said.
Severance tax collections - which have been hard-hit by a decline in coal sales and in near-record low natural gas prices - came in $700,000 over estimates at $46.7 million, and 20.5 percent above December 2011.
However, Muchow said that was strictly a timing issue, since severance taxes are due on the 31st of the month, and Dec. 31, 2011 fell on a Saturday.
Year-to-date, severance tax collections of $198.8 million are about $19.2 million below projections.
All other tax collections are at or slightly above estimates, Muchow said.
"All things considered, it's not so bad so far," he said.
Reach Phil Kabler at firstname.lastname@example.org or 304-348-1220.