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June 2020 Cash Collections report available

Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2020 Cash Collections Report for June 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 June were 2.7% lower than cash collections received in FY 2019, a difference of $(108.5) 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 June were $134.6 million less than in FY 2019 through June, 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 $37.2 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 $12.8 million. General business taxes cash collections were $24.5 million more in FY 2020 through June 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 further since May."

Notable cash collections items on a June fiscal year-to-date basis included: Total personal income tax cash collections of $1,241.9 million, down 9.8% year-to-date. COVID-19 appears to have reduced personal income tax cash collections by $171.9 million on a fiscal year-to-date basis through June. o Personal income tax withholding payments are up $43.2 million or 3.5% year-to-date, above the 2.6% fiscal 2019 year to date growth rate recorded in June 2019. o Personal income tax refunds and adjustments are $9.8 million, or 2.8%, more year-to-date, vs. the 2.6% increase recorded for the fiscal 2019 year-to-date period in June 2019. o Year-to-date estimated and final payments are a combined $168.0 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 and June 15, 2019 last year. Year-to-date June 2020 sales and use tax cash collections were up 3.3% in comparison to FY 2019 through June with total non-motor vehicle receipts $43.9 million more, meal and beverage receipts 5.6% less and motor vehicle sales and use tax receipts (i.e., Registry Receipts) $6.8 million less than the prior year. All other general revenue sources cash collections through June were up $92.6 million relative to last fiscal year. This increase reflects higher business corporation tax cash collections of $14.9 million, higher financial institutions tax receipts of $21.9 million, higher cash collections for estate and transfer taxes of $15.1 million and increased other miscellaneous revenues of $40.2 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 $24.5 million in year-to-date FY 2020. The increase in business corporation tax cash collections includes $47.8 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 June 2020 departmental receipts cash collections are $7.1 million, or 1.7% more than in FY 2019 through June due to the transfer of settlement revenues to the general fund by the Office of the Attorney General. The lottery transfer in the fiscal year reflects transfers of $283.1 million in FY 2020 through June vs. $393.8 million in FY 2019 through June. 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 June gaming activity. The negative discrepancy between the two fiscal years reflects the closure of the Twin River Casino Hotel and the Tiverton Casino Hotel for the period March 14, 2020 through June 7, 2020 as a result of the COVID-19 pandemic.

Notable month of June cash collections items included: Decreased June 2020 personal income tax cash collections of $11.6 million, 8.5% below June 2019. o The decrease in June 2020 personal income tax cash collections is due to a decrease in personal income tax estimated payments of $29.2 million or 59.4%. This decrease is likely attributable to the shift in the second quarter estimated payments due date from June 15, 2020 to July 15, 2020 in response to the COVID-19 pandemic. o Personal income tax refunds and adjustments for June 2020 were $4.7 million or 21.9% more than in June 2019. o Personal income tax final payments are $10.9 million more, or 202.0% in June 2020 and withholding payments of $114.0 million for June 2020 are $11.3 million, or 11.0% higher than for June 2019. The increased withholding tax payments are due in part to the $600 federal unemployment "bonus" payments that were passed as part of the CARES Act in May 2020. Lower June 2020 sales and use tax cash collections of $3.6 million or 3.6% from June 2019 with lower net taxation receipts by $4.6 million and sharply lower meal and beverage sales tax receipts by $7.6 million. These revenue sources were reduced by the capacity constraints placed on retail outlets and restaurants and bars in response to the COVID-19 pandemic. June 2020 motor vehicle use tax receipts were 4.8% higher than in June 2019. Total general business taxes for June are $5.7 million more than the same month last fiscal year, an increase of 8.0%. This increase was largely attributable to public utilities gross earnings tax receipts, which are $7.8 million above last June or 33.3%. The increase in public utilities gross earnings tax receipts was offset by lower insurance company gross premiums tax receipts of $3.5 million in June 2020. Increased cigarette and other tobacco products tax cash collections of $3.8 million, a variance of 34.7% in June 2020 may have resulted from the ban in Massachusetts of flavored tobacco products, including menthol flavor, taking effect on June 1, 2020. Lagging estate and transfer tax receipts in June 2020 of $2.3 million, a difference of 56.0%, and lower departmental receipts cash collections in June 2020 of $1.2 million, a variance of 3.1% also contributed the year-over-year shortfall. Lower receipts from the lottery transfer of $26.5 million, a decrease of 66.6% was an improvement from the months of April and May as the Twin River Casino Hotel and the Tiverton Casino Hotel reopened for business on June 8, 2020 albeit with a significantly reduced number of VLTs and traditional table games available.

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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