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FY2018 Monthly Revenue Assessment Report for July 2018

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2019 Revenue Assessment Report for July 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 enacted in the FY 2019 budget. The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.

1. July Year-To-Date Performance. On a fiscal year-to-date basis, the July 2018 report shows that adjusted total general revenues are ahead of expected total general revenues, based on the revenue estimates enacted in the FY 2019 budget and the Office of Revenue Analysis' estimation methodology, with adjusted total general revenues $7.0 million more than expected total general revenues, a variance of 3.0 percent. The strongest driver of this outperformance is personal income tax withholding payments revenues which are up $8.1 million, or 9.3 percent, over expectations. In addition, adjusted sales and use tax revenues are $2.7 million more than expected, a variance of 2.7 percent. On the negative side, adjusted business corporation tax revenues are $4.8 million less than expected, a variance of 43.8 percent. At this time, it is difficult to determine the impact of the change in the estimated payments schedule for business corporation tax filers or whether the additional revenues expected from the passage of the Tax Cuts and Jobs Act have been realized in a time consistent manner with expectations.

2. July Monthly Performance. Given that July is the first month of the fiscal year, there is no difference in the assessment of revenues on a fiscal year-to-date and a monthly basis.

Regarding July year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: Fiscal year-to-date adjusted total general revenues through July are ahead expectations by $7.0 million, or 3.0 percent, a solid start to the new fiscal year; Adjusted personal income tax revenues are $7.0 million above expectations, a variance of 8.0 percent, led by strong personal income tax withholding payments revenues which are likely reflective of a strong labor market in the state; Adjusted sales and use tax revenues through July are ahead of expectations by $2.7 million, or 2.7 percent, reflective of a resurgence in consumer spending that began in the spring of 2018; Adjusted departmental receipts revenues are $2.6 million above the estimate which may indicate earlier receipt of certain large revenue streams than in previous fiscal years; and Adjusted business corporation tax revenues are $4.8 million behind expectations, a variance of 43.8 percent, where this discrepancy between adjusted revenues and expected revenues may have to do with how closely aligned the timing of expected revenues are with their actual receipt.

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) 574-8

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