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May 2020 Cash Collections report released

Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2020 Cash Collections Report for May 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 May were 2.8% lower than cash collections received last fiscal year through May, a difference of $(98.3) million. The decline in fiscal year-to-date cash collections reflects the ongoing impacts of the COVID-19 pandemic on the state's economy. FY 2020 personal income tax cash collections through May were $123.1 million less than in FY 2019 through May, likely reflecting the delay in the tax filing and payment deadline from April 15, 2020 to July 15, 2020. FY 2020 year-to-date sales and use tax cash collections were $40.8 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) yielding a difference between FY 2020 and FY 2019 year-to-date collections of $15.1 million. General business taxes cash collections were $33.8 million more in FY 2020 through May than in the same period in FY 2019, but the spread between the current fiscal year-to-date and prior fiscal year to date has narrowed considerably since March."

Notable cash collections items on a May fiscal year-to-date basis included: Total personal income tax cash collections of $1,117.6 million, down 9.9% year-to-date. COVID-19 appears to have reduced personal income tax cash collections by $150.4 million on a fiscal year-to-date basis through May. o Personal income tax withholding payments are up $31.9 million or 2.9% year-to-date, above the 2.4% fiscal 2019 year to date growth rate recorded in May 2019. o Personal income tax refunds and adjustments are $5.1 million, or 1.6%, more year-to-date, vs. the 3.9% increase recorded for the fiscal 2019 year-to-date period in May 2019. o Year-to-date estimated and final payments are a combined $149.8 million less in FY 2020 than in FY 2019, a decrease of 33.3% fiscal year-to-date over fiscal year-to-date. This substantive decline is likely a result of the postponement of the tax filing and payments deadline to July 15, 2020 vs. April 15, 2019 last year. Year-to-date May 2020 sales and use tax cash collections were up 4.0% in comparison to FY 2019 through May with total non-motor vehicle receipts $48.1 million more, meal and beverage receipts 2.0% less and motor vehicle sales and use tax receipts (i.e., Registry Receipts) $7.4 million less than the prior year. All other general revenue sources cash collections through May were up $60.1 million relative to last fiscal year. This increase reflects higher business corporation tax cash collections of $14.4 million, higher financial institutions tax receipts of $21.6 million, increased insurance company gross premiums tax cash collections of $3.7 million, and higher cash collections for estate and transfer taxes of $15.1 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 $33.5 million in year-to-date FY 2020. This increase includes $37.4 million of income tax payments received from 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 received from 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 May 2020 departmental receipts cash collections are $8.1 million, or 2.2% more than in FY 2019 through May 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 fiscal year reflects transfers of $269.8 million in FY 2020 through May vs. $354.0 million in FY 2019 through May. Both the FY 2020 year-to-date transfer and the FY 2019 year-to-date transfer consists of the traditional cash transfer for July through April gaming activity.

Notable month of May cash collections items included: Decreased May 2020 personal income tax cash collections of $6.3 million, 7.1% below May 2019. o The decrease in May 2020 personal income tax cash collections is due to an increase in personal income tax refunds and adjustments of $7.2 million or 40.3%. Personal income tax estimated and final payments are $3.8 million more, or 30.5%, but are offset in part by a slight decrease in withholding payments of $2.8 million, or 3.0%. Lower May 2020 sales and use tax cash collections of $16.2 million or 17.5% from May 2019 with substantively lower net taxation receipts of $10.4 million and sharply lower meal and beverage sales tax receipts of $9.4 million and lower motor vehicle use tax receipts of $4.7 million. All these measures were reduced by the halting of dine-in service at restaurants and bars and the stay-at-home order that were in place in April 2020. Total general business taxes for May are $10.2 million less than the same month last fiscal year, a decrease of 56.8%. This decrease was largely attributable to insurance company gross premiums tax receipts which are $8.3 million below last May or 94.4% and business corporation tax receipts which were $1.9 million less than in May 2019, or 37.3%. Decreased cigarette and other tobacco products tax cash collections of $1.0 million, a variance of 9.1%, lagging estate and transfer tax receipts in May 2020 of $1.7 million, a difference of 55.8%, and lower departmental receipts cash collections in May 2020 of $3.8 million, a variance of 20.0%. Lower receipts from the lottery transfer of $31.0 million, a decrease of 91.3% due to the closure of the state's two state operated casinos in April 2020.

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) 378-1080.

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