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October 2019 revenue assessment report released

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) has released its FY 2020 Revenue Assessment Report for October 2019. 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 2020 budget. The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.

October Year-To-Date Performance. On a fiscal year-to-date basis, the October 2019 report shows that adjusted total general revenues lead expected total general revenues, based on the revenue estimates enacted in the FY 2020 budget and the Office of Revenue Analysis' estimation methodology, with adjusted total general revenues $23.3 million more than expected total general revenues, a variance of 1.9%. The largest drivers of this overperformance are: estate and transfer tax revenues, which are $25.3 million above the estimate, due to the receipt of large, infrequently occurring payment(s) in October; personal income tax revenues, which are $12.1 million more than expected, a variance of 2.7%, led by personal income tax estimated and final payments revenues; insurance company gross premiums tax revenues, which are $5.1 million ahead of expectations through October, a variance of 21.9%; sales and use tax adjusted revenues, which exceed the estimate by $5.0 million fiscal year-to-date, or 1.2%; financial institutions tax revenues, which are $3.1 million above expectations, a difference of 104.0%; public utilities gross earnings tax revenues, which lead expectations by $2.2 million or 9.6%; and cigarette and other tobacco products tax revenues which are $1.8 million more than expected, a variance of 3.7%. Shortfalls in adjusted revenues include business corporation tax revenues ,which are $17.3 million below expectations, or 31.2%; lottery transfer adjusted revenues from gaming activity in the first quarter of the fiscal year, which are $7.9 million less than the estimate or 8.0%; and departmental receipts revenues which are $4.3 million less than expected, a variance of 5.6%.

Regarding October year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: Fiscal year-to-date adjusted total general revenues through October are ahead of expectations by $23.3 million, or 1.9%, due in part to the strong performance of estate and transfer tax revenues which are $25.3 million more than expected; Adjusted personal income tax revenues are $12.1 million above expectations, a variance of 2.7%, due largely to strong personal income tax estimated and final payments revenues which are a combined $17.1 million above the estimate; Adjusted sales and use tax revenues through October are $5.0 million more than expected for FY 2020 year-to-date; Fiscal year-to-date adjusted departmental receipts revenues are $4.3 million below the fiscal year-to-date through October estimate, a variance of 5.6%; Lottery transfer adjusted fiscal year-to-date through October revenues, reflecting FY 2020 first quarter gaming activity, are $7.9 million below expectations as the newly opened Encore Boston Casino continues to negatively impact gaming at the Twin River Casino Hotel; Adjusted business corporation tax revenues are $17.3 million behind the estimate but generally strong performance in the other general business tax revenues offset more than half of this shortfall.

October Monthly Performance. For the month of October, the report indicates that adjusted total general revenues are $27.3 million above expectations for the month or a variance of 9.1%. The primary drivers of this overage are estate and transfer tax and personal income tax revenues which are a combined $35.5 million, or 33.6%, above expectations. Each of the components of personal income tax revenues exceeded expectations in October by at least $1.5 million. In addition, better-than-expected revenue increases were realized in sales and use tax and cigarette and other tobacco products excise tax revenues. Negative variances were reported in business corporation tax revenues, $(10.0 million) or 81.0%; lottery transfer revenues, $(3.1 million), or 9.4%, and insurance company gross premiums tax revenues, $(1.1 million) or 77.5%.

The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2020, 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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