Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2020 Revenue Assessment Report for January 2020. 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.
January Year-To-Date Performance. On a fiscal year-to-date basis, the January 2020 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 $53.1 million more than expected total general revenues, a variance of 2.3%. The largest drivers of this overperformance were general business tax revenues which were $46.5 million more than revised expectations, a variance of 23.2%. This surplus was reinforced by overages in excise tax revenues of $6.1 million, in departmental receipts revenues of $4.0 million and in the lottery transfer of $943,275. These positive contributions to total general revenues were offset by shortfalls in personal income and other taxes revenues of $4.4 million, a difference of 0.5%.
Regarding January year-to-date performance, Director of Revenue Mark A. Furcolo made the following observations: • Fiscal year-to-date adjusted total general revenues through January surged ahead of expectations by $53.1 million, or 2.3%, attributable in large part to the receipt of $27.5 million in estimated income tax payments made by pass-through entities on behalf of their shareholders; • Adjusted personal income tax revenues were $3.5 million below expectations, a variance of 0.4%, due largely to weaker than expected personal income tax estimated payments and stronger than expected personal income tax refunds and adjustments which were off a combined $15.3 million from the estimate. These shortfalls were offset in part by higher than expected personal income tax final and withholding payments which were $11.8 million more than expected; • Adjusted sales and use tax revenues through January were above expected sales and use tax revenues for the period at $5.9 million, a variance of 0.8% and likely reflective of a strong holiday shopping season both online and at brick and mortar stores; • Fiscal year-to-date adjusted business corporation tax revenues were $30.6 million above the fiscal year-to-date through January estimate, a variance of 44.5% with nearly 90% of this difference due to the estimated income tax payments made by pass-through entities on behalf of their shareholders; • Adjusted fiscal year-to-date insurance company gross premiums tax revenues were $11.9 million above expectations with both health insurance and non-health insurance components exceeding expectations by$7.5 million and $4.4 million respectively; • Fiscal year-to-date through January public utilities gross earnings tax revenues were $4.8 million, or 10.3%, departmental receipts revenues were $4.0 million, or 2.9%, and the lottery transfer was $943,275, 0.5% above their respective estimates; • Adjusted health care provider assessment revenues were $1.0 million behind the estimate, down 4.1% on a fiscal year-to-date basis through Janaury.
January Monthly Performance. For the month of January, the report indicates that adjusted total general revenues were $47.1 million above expectations for the month or a variance of 13.2%. The largest drivers of this outperformance were general business taxes which were $23.0 million ahead of projections, or 259.5%; personal income tax and sales and use tax revenues which were a combined $22.9 million above the combined estimate, a variance of 8.6%; estate and transfer tax adjusted revenues which were $1.3 million or 68.4% more than expected; and departmental receipts revenues which were also $1.3 million above the estimate or 3.7% These surpluses were offset slightly by financial institutions tax revenues which were $3.3 million less than expected and cigarette and other tobacco products tax revenues which were 15.3% below the estimate.
Regarding performance for the month of January, Director of Revenue Mark A. Furcolo made the following observations: • January adjusted total general revenues were far above expectations by $47.1 million, a variance of 13.2%, with more than half of this outperformance due to the estimated income tax payments made by pass-through business entities on behalf of their shareholders; • Adjusted January personal income tax revenues were $15.7 million above expectations, a difference of 9.9%, due to much stronger than expected personal income tax estimated, final, and withholding payments which were $21.2 million above the estimate, a difference of 12.7% and higher than expected personal income tax refunds and adjustments which were $5.5 million more, a variance of 66.6%. • Adjusted monthly sales and use tax revenues were $7.2 million above expected sales and use tax revenues for the month, a variance of 6.7% and likely reflective of a strong online holiday shopping season; • January business corporation tax revenues were $26.4 million above the monthly estimate, a variance of 636.8% while financial institutions tax revenues were $3.3 below the estimate, a variance of 1.370.9%; • Adjusted monthly cigarette and other tobacco products tax revenues were $1.7 million below expectations, or 15.3% while estate and transfer tax revenues for January were $1.3 million above the estimate or 68.4%; • Adjusted departmental receipts revenues for January were $1.3 million above the revised estimate for the month, or 3.7%.
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.