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January 2020 Cash Collections report available

Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2020 Cash Collections Report for January 2020. The Cash Collections Report, which is issued monthly, compares current fiscal year cash collections by revenue item on a fiscal year-to-date and monthly basis to prior fiscal year cash collections by revenue item. The cash collections report makes no adjustments for the timeliness of the receipt of deposits and provides readers with insight into the state's cash flow over the course of the fiscal year.

Rhode Island Department of Revenue Director Mark A. Furcolo noted: "FY 2020 total general revenue cash collections through January are 6.2% higher than cash collections received last fiscal year through January, a difference of $146.6 million. The fiscal year-to-date growth rate remains behind the 7.3% growth rate recorded in the FY 2019 through January period last year with much of the difference due to the reduced lottery transfer in fiscal year-to-date 2020. FY 2020 personal income tax cash collections through January were $44.9 million more than in FY 2019 through January, while FY 2020 year-to-date sales and use tax cash collections were $52.5 million above the same period last fiscal year. Year-to-date FY 2020 estate and transfer tax cash collections continue to be supported by the receipt of $25.8 million in large infrequently occurring estate and transfer tax payment(s) in October and were $20.0 million more than last fiscal year. General business taxes cash collections were $44.4 million more in FY 2020 through January than in the same period in FY 2019, driven primarily by business corporation and insurance company gross premiums taxes."

Notable cash collections items on a January fiscal year-to-date basis included: Total personal income tax cash collections of $867.0 million, up 5.3% year-to-date. o Personal income tax withholding payments are up $26.4 million or 3.8% year-to-date, above the 3.3% fiscal 2019 year to date growth rate recorded in January 2019. o Personal income tax refunds and adjustments are $12.5 million, or 21.8%, more year-to-date, vs. the 11.9% increase recorded for the fiscal 2019 year-to-date period in January 2019. o Year-to-date estimated and final payments are a combined $31.0 million more in FY 2020 than in FY 2019, an increase of 17.6% fiscal year-to-date over fiscal year-to-date. This compares to a decrease of 15.3% for the same period in FY 2019. Year-to-date January 2020 sales and use tax cash collections were up 7.8% in comparison to FY 2019 through January with total non-motor vehicle receipts $49.8 million more, meal and beverage receipts 6.0% more and motor vehicle sales and use tax receipts (i.e., Registry Receipts) $2.9 million more than the prior year. All other general revenue sources cash collections through January were up $70.1 million relative to last fiscal year. This increase reflects higher cash collections for estate and transfer taxes of $20.0 million, higher business corporation tax cash collections of $19.1 million, and higher insurance company gross premiums tax receipts of $19.0 million vs. the same period last fiscal year. o The increase in business corporation tax cash collections is primarily attributable to a jump in estimated payments of $41.0 million in year-to-date FY 2020. This increase includes $27.5 million of income tax payments made by pass-through entities on behalf of their shareholders. In the FY 2020 enacted budget, a provision was included that allowed pass-through entities to make income tax payments on behalf of their shareholders at a rate of 5.99% with the shareholders receiving a credit on their personal income tax returns in the amount of the income taxes paid by the pass-through entity on their behalf. It is expected that any increase in estimated payments made by pass-through entities for this purpose will be offset by reduced final payments or increased refunds paid to the shareholders on their personal income tax returns. Fiscal year-to-date through January 2020 departmental receipts cash collections are $15.5 million, or 5.2% more than in FY 2019 through January due to the transfer of settlement revenues to the general fund by the Office of the Attorney General and higher collections of interest and penalty on overdue taxes. The lottery transfer in the new fiscal year reflects transfers of $186.5 million in FY 2020 through January vs. $223.0 million in FY 2019 through January. The FY 2020 year-to-date transfer consists of only the traditional cash transfer for July through December gaming activity vs. a contemporaneous transfer of $27.2 million and the traditional cash transfer for July through December gaming activity in FY 2019 through January.

Notable month of January cash collections items included: Increased January 2020 personal income tax cash collections of $18.2 million, 11.6% above January 2019. o The increase in January 2020 personal income tax cash collections is due to positive variances in all four components of the personal income tax with withholding payments up $9.3 million or 8.4%, refunds and adjustments more by $2.8 million or 26.2%, final payments ahead by $1.2 million, a variance of 29.1%, and estimated payments up by $10.4 million or 19.9%. Higher January 2020 sales and use tax cash collections of $10.7 million or 10.3% from January 2019 with strong monthly growth in sales and use taxes received from sales activity other than motor vehicle purchases and meals and beverages prepared for immediate consumption of 11.3% coupled with a decrease in sales tax collections on meals and beverages of 6.3% and an increase in use tax collected on the registration of motor vehicles of $226,676. Total general business taxes for January are $20.2 million more than the same month last fiscal year, an increase of 173.3%. This increase was attributable to the $27.5 million of business corporation tax estimated income tax payments made by pass-through entities on behalf of their shareholders in January 2020. This increase in general business taxes cash collections in January 2020 was offset modestly by the payment of a $3.1 million refund of financial institutions tax payments. Increased departmental receipts cash collections in January 2020 of $9.5 million, a variance of 35.8%, due to the receipt of $9.4 million in registration fees for securities in January 2020 that were received last fiscal year in December 2019. Higher estate and transfer tax cash collections in January 2020 of $1.2 million, a variance of 56.5% versus cash collection in January of 2019. Lower cigarette and other tobacco products excise tax cash collections for January 2020 of $2.9 million vs. January 2019, a variance of 24.0%. Decreased lottery transfer cash collections for January 2020 vs. January 2019 of $2.8 million, a result of lower contemporaneous transfers to the general fund in January 2019.

The full cash collections report can be found on the Department of Revenue's web site, www.dor.ri,gov, under the Revenue Analysis directory or at this link: http://www.dor.ri.gov/revenue-analysis/2020.php 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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