Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2018 Revenue Assessment Report for May 2018. The Revenue Assessment Report, which is issued on a monthly basis, compares the adjusted general revenues by revenue source on a fiscal year-to-date and monthly basis to expected general revenues by revenue source. Expected general revenues are estimated by the DOR's Office of Revenue Analysis from the revenue estimates adopted at the May 2018 Revenue Estimating Conference (REC). The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.
1. May Year-To-Date Performance. On a fiscal year-to-date basis, the May 2018 report shows that adjusted total general revenues are ahead of expected total general revenues, based on the revenue estimates adopted at the May 2018 REC and the Office of Revenue Analysis' (ORA) estimation methodology, with adjusted total general revenues $935,410 more than expected total general revenues, a variance of 0.03 percent vs. the 2.3 percent variance that was recorded in April based on the revised estimates adopted at the November 2017 REC. The principals of the May 2018 REC increased the estimate of total general revenues for FY 2018 by $75.5 million. The major contributors to this surplus are insurance company gross premiums tax revenues, $13.2 million more than expected; cigarette excise and other tobacco products tax revenues, $2.0 million ahead of expectations; personal income tax revenues, $1.4 million above revised estimates; and departmental receipts adjusted revenues, $1.2 million more than expected. The estimates for insurance company gross premiums tax revenues, personal income tax revenues and departmental receipts revenues were revised upward by $5.0 million, $57.9 million, and $9.5 million respectively at the May 2018 REC. FY 2018 year-to-date business corporation tax revenues are $12.0 million less than estimated; sales and use tax revenues are $3.5 million below expectations; and estate and transfer tax revenues are $1.2 million behind the estimate. The estimates for business corporation tax revenues and sales and use tax revenues were reduced by $11.7 million and $1.5 million respectively at the May 2018 REC while the estimate for estate and transfer tax revenues was increased by $12.8 million.
2. May Monthly Performance. For the month of May, the report shows that adjusted total general revenues are ahead of expected total general revenues, based on the revenue estimates adopted at the May 2018 REC and the Office of Revenue Analysis' estimation methodology, with adjusted total general revenues $1.2 million more than expected total general revenues, a variance of 0.5 percent, below the 3.8 percent variance reported in April when the revised estimates were from the November 2017 REC. The major contributors to this overage are insurance company gross premiums tax revenues, $4.7 million ahead of estimates; personal income tax revenues, $4.0 million above expectations; cigarette excise and other tobacco products tax revenues, $1.5 million ahead of estimates; and departmental receipts revenues, $1.3 million more than estimated. These monthly revenue gains are offset by financial institutions tax revenues, $6.2 million below estimates; business corporation tax revenues and sales and use tax revenues, each $1.4 million less than expected for May and estate and transfer tax revenues, $1.3 million behind estimates in May. A total of nine revenue items exceeded estimates for the month of May.
Regarding May year-to-date performance, Director of Revenue Mark Furcolo made the following observations: • Fiscal year-to-date revenues through May are in line with estimates adopted at the May 2018 Revenue Estimating Conference. The estimate for total general revenues was increased by $75.5 million at the conference so it is reassuring to see that adjusted total general revenues through May are consistent with that upward revision. • Adjusted personal income tax revenues are $1.4 million above expectations, a variance of 0.1 percent. o Adjusted personal income tax withholding payments through May are $2.0 million more than estimated, or 0.2 percent. The estimate for personal income tax withholding payments was decreased by $2.0 million at the May 2018 REC. o FY 2018 through May adjusted personal income tax refunds and adjustments are $2.5 million less than expectations, a variance of 0.8 percent. The principals of the May 2018 REC reduced the estimate for personal income tax refunds and adjustments by $6.0 million. o Fiscal year-to-date through May adjusted personal income tax estimated payments revenues are $779,270 above expectations, a variance of 0.4 percent. The personal income tax estimated payments estimate was revised up by $27.5 million at the May 2018 Revenue Estimating Conference. o FY 2018 through May personal income tax final payments are $3.9 million less than expected, a variance of 1.8 percent. The estimate for personal income tax final payments was increased by $26.0 million at the May 2018 REC. • Fiscal year-to-date adjusted insurance company gross premiums tax revenues through May are $13.2 million above expectations. Fiscal year-to-date 2018 includes $11.9 million of reimbursed Historic Structures Tax Credits. The estimate for the insurance company gross premiums tax revenues was revised up by $5.0 million at the May 2018 REC. • Adjusted cigarette excise and other tobacco products tax revenues for fiscal year-to-date through 2018 are $2.0 million, or 1.6 percent, above the estimate adopted at the May 2018 Revenue Estimating Conference. • FY 2018 through May adjusted departmental receipts revenues are $1.2 million above expectations, a variance of 0.7 percent. The departmental receipts estimate was increased by $9.5 million at the May 2018 REC. • Fiscal year-to-date adjusted business corporation tax revenues are $12.0 million below expectations, a variance of 12.6 percent. The principals of the May 2018 REC reduced the estimate for business corporation tax revenues by $11.7 million. • FY 2018 through May sales and use tax revenues are $3.5 million less than estimated, a variance of 0.4 percent. The estimate for sales and use tax revenues was lowered by $1.5 million at the May 2018 Revenue Estimating Conference. • Adjusted estate and transfer tax revenues through May are $1.2 million below expectations, or 2.7 percent. The estate and transfer tax estimate was revised up by $12.8 million at the May 2018 REC. • Fiscal year-to-date adjusted financial institutions tax revenues are $1.1 million less than expected, a variance of 13.0 percent.
Regarding the May monthly performance, Director Furcolo made the following observations: • May adjusted revenues exceeded expectations by $1.2 million, or 0.5 percent with strong performance in insurance company gross premiums tax, personal income tax, cigarette excise and other tobacco products tax, and departmental receipts revenues. • Month of May insurance company gross premiums tax revenues are $4.7 million more than expected monthly revenues and include $5.4 million of historic structures tax credits usage. • Month of May adjusted personal income tax revenues are $4.0 million above expectations, a variance of 4.6 percent. o May adjusted personal income tax withholding payments are $2.4 million more than expected, a variance of 2.5 percent. • May adjusted departmental receipts revenues are $1.3 million more than expected, while May cigarette excise and other tobacco tax revenues are $1.5 million above expectations. • Month of May adjusted financial institutions tax revenues are $6.2 million less than expected, a variance of 8,878.1 percent. This shortfall is due to processing of large refund(s) in May. • May business corporation tax revenues are $1.4 million below expectations, a variance of 50.0 percent. • Adjusted sales and use tax revenues for May are $1.4 million less than the monthly estimate, or 1.7 percent.
The entire report can be found on the Department of Revenue's web site, www.dor.ri,gov, under the Revenue Analysis header on 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.