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R.I. Department of Revenue releases March 2017 cash collections report

Providence, R.I. -- The Rhode Island Department of Revenue has released its FY 2017 Cash Collections Report for March 2017. The Cash Collections Report, which is issued on a monthly basis, compares current fiscal year cash collections by revenue item on a fiscal year-to-date and monthly basis to prior fiscal year cash collections by revenue item. The cash collections report makes no adjustments for the timeliness of the receipt of revenues and provides readers with insight into the state's cash flow over the course of the fiscal year.

Rhode Island Department of Revenue Director Robert S. Hull noted: "FY 2017 total general revenue cash collections through March are down 1.3 percent, or $32.3 million less than was received last fiscal year through March of 2016. While this is a reversal in the year on year trend observed in February, a substantial share of March's underperformance is driven by the timing of receipts and may be corrected by fiscal year end." The growth rate for FY 2017 through March of 1.3 percent was well below the 2.7 percent growth rate recorded in the previous year. FY 2017 personal income tax cash collections through March were $4.2 million less than in FY 2016 through March while FY 2017 through March sales and use tax cash collections were $12.1 million more than the same period in FY 2016. FY 2017 through March departmental receipts were greater than the same period in FY 2016 by a total of $17.8 million. The lottery transfer for the FY 2017 year-to-date period through March was $7.1 million less than the same period in FY 2016 while fiscal year-to-date through March 2017 all other revenues were $50.8 million less than the same period last year.

Notable cash collections items on a March fiscal year-to-date basis included: Total personal income tax cash collections of approximately $867.4 million, down $4.2 million or 0.5 percent year-to-date. o Personal income tax withholding payments up $40.8 million or 5.0 percent year to date, significantly more than the 2.2 percent fiscal year to date growth rate recorded in March 2016. This increase includes the receipt of a large, infrequently occurring payment of $3.3 million in August 2016 and $5.2 million of receipts that were erroneously posted to personal income tax withholding rather than financial institutions and insurance companies gross premiums taxes cash collections. o Personal income tax final payments up $14.0 million, or 32.3 percent year-to-date, a sharp reversal from the 9.7 percent fiscal year-to-date growth rate for the same period last fiscal year. o Personal income tax refunds and adjustments up $63.2 million year-to-date due primarily to the Division of Taxation working down the backlog of personal income tax refunds that resulted from enhanced fraud protocols and processing changes employed for the TY 2015 filing season and more rapid processing of TY 2016 income tax refunds. FY 2017 year-to-date March personal income tax refunds and adjustments tax cash collections also include a $5.2 million negative adjustment to account for a misposting of receipts to personal income tax withholding made in previous months. Year-to-date March 2017 sales and use tax cash collections up $12.1 million, or 1.6 percent, from FY 2016 through March although the spread recorded in March 2017 fiscal year-to-date is below the 2.9 percent growth recorded in March 2016 fiscal year-to-date. FY 2017 through March business corporations tax cash collections are $18.6 million less than for the same period last fiscal year. It should be noted that the filing deadline for returns and final payments for calendar year C-corporations shifted from March 15, 2016 for TY 2015 returns to April 15, 2017 for TY 2016 returns. FY 2017 all other general revenue sources cash collections through March are down $50.8 million, including the $18.6 million shortfall in business corporations tax cash collections, relative to last fiscal year at this time, due in large part to fiscal year-to-date-over-fiscal year-to-date declines motor vehicle license and registration fee, public utilities gross earnings tax, estate and transfer tax, and cigarette and other tobacco products excise tax cash collections. Fiscal year-to-date through March 2017 departmental receipts cash collections are $17.8 million, or 6.4 percent, more than in FY 2016 through March primarily due to increased FY 2016 hospital licensing fee payments received in July 2016. The year-to-date FY 2017 lottery transfer is down $7.1 million from the same period last fiscal year due in large part to a significant decline in traditional lottery games cash collections and substantive underperformance in Twin River video lottery terminals offset in part by improved results from Twin River's traditional table games and poker tables and Newport Grand's video lottery terminals.

Notable month of March cash collections items included: March 2017 personal income tax cash collections of $62.6 million, 23.1 percent below March 2016 and significantly below the 69.7 percent growth rate recorded last year. o March 2017 personal income tax withholding payments cash collections were down 0.6 percent, or $622,291, versus March 2016 in spite of $3.2 million of receipts included in March 2017 that were incorrectly posted. o A year-over-year increase in March 2017 personal income tax refunds and adjustments of $23.9 million including a $5.2 million negative adjustment to transfer receipts from personal income tax withholding to financial institutions and insurance companies gross premiums taxes. o February 2017 personal income tax final payments were up 43.7 percent or $5.2 million more than March 2016. March 2017 sales and use tax cash collections of $69.8 million are 1.1 percent below March 2016. The decrease in March 2017 sales and use tax cash collections is due to a decrease in net Taxation receipts and sales and use tax payments from the Providence Place Mall offset by an increase in registry receipts. March 2017 business corporations tax cash collections are $16.8 million less than in March 2016. It should be noted that the filing deadline for returns and final payments for calendar year C-corporations shifted from March 15, 2016 for TY 2015 returns to April 15, 2017 for TY 2016 returns. Lower all other revenues cash collections than in March 2016 by a total of $34.0 million or 19.6 percent, including the $16.8 million deficit on business corporations tax cash collections. Multi-million dollar decreases in insurance companies gross premiums taxes, public utilities gross earnings taxes, financial institutions taxes, and motor vehicle license and registration fees are driving this shortfall. Decreased lottery transfer for March 2017 of $112,370 or 0.4 percent versus March 2016. o Substantial year-over-year decreases in the transfer from the video lottery terminals at Twin River were the main cause of the decrease.

The full cash collections report can be found on the Department of Revenue's web site, www.dor.ri,gov, under the Revenue Analysis directory or at this link: http://www.dor.ri.gov/revenue-analysis/2017.php under the State Reports tab.

Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at paul.grimaldi@revenue.ri.gov or by phone at (401) 574-8766.

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