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R.I. Department of Revenue releases September 2018 revenue report

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2019 Revenue Assessment Report for September 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 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. September Year-To-Date Performance. On a fiscal year-to-date basis, the September 2018 report shows that adjusted total general revenues are slightly below 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 $8.2 million less than expected total general revenues, a variance of 0.9 percent. The primary sources of the variance are personal income tax revenues which are down $8.7 million, or 2.6 percent, from expectations; insurance company gross premiums tax revenues which trail expectations by $5.9 million or 21.6 percent; business corporation tax revenues which are $2.6 million less than expected or 5.9 percent; and public utilities gross earnings tax revenues which are $2.4 million, or 9.7 percent, below the fiscal year-to-date through September estimate. Offsetting these shortfalls are departmental receipts adjusted revenues which lead expectations by $4.5 million or 10.8 percent; sales and use tax revenues which are $4.0 million more than expected, a variance of 1.3 percent; and adjusted realty transfer tax revenues which are $1.1 million above the estimate, or 27.0 percent, due to the receipt of large payment(s) of $1.2 million in August.

2. September Monthly Performance. For the month of September, the report indicates that adjusted total general revenues are $10.1 million below expectations or a variance of 2.5 percent. The primary driver of this shortfall is insurance company gross premiums tax revenues which are $5.6 million, or 20.8 percent below expectations and personal income tax revenues which are $4.4 million, or 2.9 percent, less than expected. Within personal income tax revenues, personal income tax estimated payments are $2.9 million less than the estimate for September, a variance of 5.5 percent and personal income tax refunds and adjustments revenues are $1.2 million more than the estimate or 29.9 percent. Additional shortfalls in adjusted vs. expected monthly revenues are found in public utilities gross earnings tax revenues which are $2.3 million or 9.4 percent less than expected and cigarette excise and other tobacco products tax revenues which lag estimates by $1.5 million or 10.8 percent. Substantive positive variances were reported in business corporation tax revenues, $2.1 million or 7.0 percent and estate and transfer tax revenues, $1.2 million or 60.5 percent above their monthly estimates.

Regarding the September year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: Fiscal year-to-date adjusted total general revenues through September are behind expectations by $8.2 million, or 0.9 percent; Adjusted personal income tax revenues are $8.7 million below expectations, a variance of 2.6 percent, due to lower than expected personal income tax estimated and withholding payment revenues and larger than expected refunds and adjustments; o FY 2019 year-to-date adjusted personal income tax revenues are $10.9 million, or 3.4 percent, higher than FY 2018 year-to-date adjusted personal income tax revenues were at this time last year. Adjusted sales and use tax revenues through September are ahead of expectations by $4.0 million, or 1.3 percent, reflective of a continued resurgence in consumer spending that began in the spring of 2018; o FY 2019 year-to-date adjusted sales and use tax revenues are $17.9 million, or 6.4 percent, more than FY 2018 year-to-date adjusted sales and use tax revenues were at this time last year. Adjusted departmental receipts revenues are $4.5 million above the estimate, a variance of 10.8 percent; and Adjusted insurance company gross premiums tax, business corporation tax, and public utilities gross earnings tax revenues are a combined $10.9 million below expectations, a variance of 11.3 percent. This variance is likely driven in part by the change in the estimated payments schedule for business tax payers that was implemented effective January 1, 2018.

Regarding the month of September performance, Director of Revenue Mark A. Furcolo made the following observations: September total general revenues fell short of expectations by $10.1 million, or 2.5 percent, with the shortfall primarily attributable to the personal income tax and all other general revenue sources, which include general business taxes among other items; Adjusted personal income tax revenues are $4.4 million below the estimate for September, a variance of 2.9 percent, due to below estimate personal income tax estimated payment revenues and above estimate personal income tax refunds and adjustments revenues; Adjusted sales and use tax revenues for September are in line with expectations; September adjusted business corporation tax revenues are $2.1 million more than expected, a variance of 7.0 percent, while insurance company gross premiums tax and public utilities gross earnings tax revenues are a combined $7.9 million below expectations, or a variance of 15.5 percent; and September estate and transfer tax revenues are $1.2 million more than the estimate, a variance of 60.5 percent.

The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2019.php.

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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