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December 2019 Revenue Assessment Report available

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2020 Revenue Assessment Report for December 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 revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC). The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.

The revised FY 2020 estimate for total general revenues was effectively unchanged from the enacted budget, however, several components of total general revenues experienced significant revisions at the November 2019 REC. Among these were estate and transfer tax revenues, increased by $25.4 million; personal income tax revenues, $15.0 million higher; sales and use tax revenues, revised up by $11.7 million; insurance company gross premiums tax revenues, increased by $6.8 million; and cigarette and other tobacco products excise tax revenues revised up by $2.3 million. Substantive downward revisions were made to the lottery transfer, $(35.7 million); business corporation tax, $(20.3 million); departmental receipts revenues, $(5.0 million); health care provider assessment revenues, $(1.7 million); and motor vehicle license update fees and alcohol excise tax revenues, $(1.2 million) each.

December Year-To-Date Performance. On a fiscal year-to-date basis, the December 2019 report shows that adjusted total general revenues lead expected total general revenues, based on the revised revenue estimates adopted at the November 2019 Revenue Estimating Conference (REC), with adjusted total general revenues $6.0 million more than expected total general revenues, a variance of 0.3%. The largest drivers of this overperformance were general business tax revenues, which were $23.5 million more than revised expectations, a variance of 12.2%. This surplus was reinforced by overages in excise tax revenues of $263,892, in departmental receipts revenues of $2,7 million and in the lottery transfer of $1.1 million. These positive contributions to total general revenues were offset by shortfalls in personal income and other taxes revenues of $21.5 million, a difference of 2.8%.

Regarding December year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: Fiscal year-to-date adjusted total general revenues through December remain ahead of expectations by $6.0 million, or 0.3%, positive but less than in November 2019; Adjusted personal income tax revenues were $19.1 million below expectations, a variance of 2.7%, due largely to weaker than expected personal income tax estimated and withholding payments, which were $19.0 million below the estimate, a difference of 2.6%, and higher than expected personal income tax refunds and adjustments, which were $5.3 million more, a variance of 10.4%. Personal income tax final payments performed well exceeding expectations by $5.1 million or 12.3%; Adjusted sales and use tax revenues through December were slightly below expected sales and use tax revenues for the period at $(1.4 million) due primarily to a transfer of $1.6 million to public utilities gross earnings tax revenues for payments made to the wrong account in June 2019; Fiscal year-to-date adjusted insurance company gross premiums tax and business corporation tax revenues were $11.7 million above the fiscal year-to-date through December estimate, a variance of 22.8% with both health insurance and non-health insurance components exceeding expectations by$7.5 million and $4.2 million respectively; Public utilities gross earnings, business corporation, and financial institutions tax revenues were a combined $12.3 million, or 10.5% above the estimate; Departmental receipts adjusted fiscal year-to-date through December revenues were $2.7 million above expectations or 2.6%; Adjusted estate and transfer tax revenues remained $2.1 million behind the estimate, down 4.7% and adjusted cigarette and other tobacco products tax revenues were $2.0 million above the revised fiscal year-to-date estimate, or 2.7%.

December Monthly Performance. For the month of December, the report indicates that adjusted total general revenues were $7.8 million below expectations for the month or a variance of 2.1%. The largest drivers of this underperformance were personal income tax and sales and use tax revenues, which were a combined $28.2 million below the estimate, a variance of 11.6%. These shortfalls were offset to an extent by a surplus in several general business tax revenues, cigarette and other tobacco products tax and lottery transfer revenues of $21.7 million, a difference of 19.6%.

Regarding performance for the month of December, Director of Revenue Mark A. Furcolo made the following observations: December adjusted total general revenues were below expectations by a modest amount of $7.8 million, a variance of 2.1%; Adjusted December personal income tax revenues were $26.3 million below expectations, a difference of 17.6%, due to weaker than expected personal income tax estimated and withholding payments, which were $19.4 million below the estimate, a difference of 12.9% and higher than expected personal income tax refunds and adjustments, which were $7.8 million more, a variance of 139.1%. Adjusted monthly sales and use tax revenues were $1.9 million below expected sales and use tax revenues for the month due primarily to an adjustment of $(1.6 million) to public utilities gross earnings tax revenues that took place in December; December adjusted insurance company gross premiums tax and business corporation tax revenues were $6.7 million above the monthly estimate, a variance of 31.1% with both health insurance and non-health insurance components exceeding expectations by$5.4 million and $1.3 million respectively; Public utilities gross earnings, business corporation, and financial institutions tax revenues were a combined $10.5 million, or 22.0% above the estimate for December; Adjusted cigarette and other tobacco products tax revenues for December were $3.3 million above the revised estimate for the month, or 29.7%.

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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