Sales Tax Exceeds Expectations, Income Tax Still Boosted from 2020 Filings

May 25, 2021

On May 14th, the Legislative Fiscal Analyst and Governor’s Office of Planning and Budget released their Revenue Snapshot summary, based on the Tax Commission’s TC-23 revenue summary for May of 2021. Growth to all state funds slightly exceeded projections, posting a 28.3% growth rate through 10 months of the Fiscal Year (FY).

From all sources, the General Fund grew 8.5 percent over May of FY 2020. Of that growth, sales and use tax was the largest contributor, with a 14.4 percent growth rate over the same time last year. Sales tax reported in May reflects sales which took place in the month of March, that were collected in April. This bump may be attributed tourism expenditures over spring break (especially in contrast to March of 2020), in addition to issuance of the final round of individual stimulus checks. Collections from ‘All Other Sources’ (including Oil and Gas Severance Tax, Court Fees, and others) were down -15.0 percent from FY 2020, but were well within the forecasted range.

Education Fund collections are still inflated primarily due to delayed income tax payments, which moved the tax filing deadline from FY 2020 to FY 2021. All other sources to the Education Fund (including Mineral Production Withholding tax) are down -21.6 percent but fall within the expected range. Corporate earnings have increasingly exceeded projections, this month posting an 89.5 percent growth rate over May 2020. Next month’s revenue summary may see an even larger disparity for Education Fund collections between fiscal years, as this year’s final tax payments (due May 17th) are collected and compared against FY 2020 figures. Similarly, the Transportation Fund (which posted a 3.9% growth rate) may see accelerated growth to close the year, as earnings are compared to revenues collected during the stay-at-home orders of spring of 2020.

To celebrate Tax Day, on May 17th the Legislative Fiscal Analyst released updated Consensus Revenue estimates. These latest estimates build on the adopted revenue forecasts from February 2021 adding changes made by the Legislature during the 2021 General Session, including tax law changes and appropriations from certain restricted accounts that impact general fund revenues.

The reports referenced in this report are available at the links below:
TC-23 Revenue Summary (Period 10, FY 2021)
Revenue Snapshot – May 2021 (FY21)