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October 2020 Cash Collections Report available

Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2021 Cash Collections Report for October 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 revenues and provides readers with insight into the state's cash flow over the course of the fiscal year.

Rhode Island Department of Revenue Acting Director James E. Thorsen noted: "FY 2021 total general revenue cash collections through October are up 10.9%, or $59.9 million, from last fiscal year through October. This positive difference is due, to a great extent, from the extension of the tax filing and payment deadlines from April 15 and June 15, 2020 to July 15, 2020 for personal income and nearly all business taxes. In total, $201.3 million in cash receipts directly related to the delay in the filing and payment due dates to July 15, 2020 were received in July 2020 that otherwise would have been paid in April through June 2020.

"After accounting for the receipt of FY 2020 tax payments in July 2020, FY 2021 cash collections are behind last fiscal year through October by 2.8%. The adjusted negative fiscal year-to-date over fiscal year-to-date growth rate experienced in October is primarily due to the receipt of large estate and transfer tax payment(s) of $25.8 million and the advance of $30.0 million of October 2019 lottery receipts in FY 2020 through October. FY 2021 personal income tax cash collections through October were $145.8 million more than in FY 2020 with approximately $151.9 million the result of the delay in the filing and payment due dates to July 15, 2020. All other general revenue cash collection through October of FY 2021 were $48.2 million above the same period last fiscal year with $41.3 million attributable to the extension of return and payments due dates to July 15, 2020. FY 2021sales and use tax cash collections through October were $26.8 million more than in FY 2020 through October."

Notable cash collections items on an October fiscal year-to-date basis included: Total personal income tax cash collections of $605.7 million, up $145.8 million or 31.7% year-to-date. The net increase in personal income tax cash collections breaks down as follows: o Personal income tax estimated payments up $27.5 million or 37.5% fiscal year-to-date, with $29.0 million in delayed payments received in July 2020; o Personal income tax final payments up $146.5 million or 444.9% fiscal year-to-date, with $142.2 million the result of the extension of the return due date to July 15, 2020; o Personal income tax refunds and adjustments up $34.2 million or 99.4% year-to-date, with $19.3 million of refunds paid in July 2020 also as a result of the extension of the return due date to July 15, 2020; o Personal income tax withholding payments in year-to-date FY 2021 were $6.0 million more than in year-to-date FY 2020, or 1.5%, below the 3.3% growth rate recorded in FY 2020 for the same period. Year-to-date FY 2021 sales and use tax cash collections up 6.3% in comparison to FY 2020 through October with total non-motor vehicle receipts $20.1 million higher, including $15.8 million less in meal and beverage receipts. Motor vehicle use tax receipts (i.e., Registry Receipts) were 15.7% more in FY 2021 year-to-date than the same period in FY 2020. FY 2020 all other general revenue sources cash collections through October were up $48.2 million relative to the same period last fiscal year. This increase includes $27.2 million of business corporation tax receipts, $13.7 million of insurance company gross premiums tax cash collections, and $347,200 of financial institutions tax cash payments that were accrued back to FY 2020. o After accounting for the cash received in July 2020 that was attributable to the extension of the payment due dates and the filing deadline, FY 2021 year-to-date business corporation tax cash collections are $13.5 million more and insurance company gross premium tax cash collections are $7.7 million more than the same period last fiscal year. o Also included in this surplus are excess cigarette and other tobacco products tax receipts of $6.0 million and $21.2 million less in estate and transfer tax payments. The increase in cigarette and other tobacco products tax cash collections may be related to Massachusetts' banning the sale of flavored tobacco, including menthol, effective June 1, 2020. The fiscal year-to-date through October 2020 lottery transfer is $55.7 million less than in FY 2020 through October 2019 with $25.3 million of this shortfall attributable to reduced revenues from the video lottery terminals located at the Twin River and Tiverton Casino Hotels and $30 million of this shortfall the result of the advancement of October 2019 lottery receipts, normally transferred in November, in year-to-date FY 2020.

Cash collections for the month of October were down $81.6 million in FY 2021 vs. FY 2020, a difference of 22.6%. This contraction was the result of large reductions in the lottery transfer, $36.5 million less in October 2020; estate and transfer tax cash receipts, $27.2 million below October 2019; personal income tax cash collections $21.9 million behind October of FY 2020, due to a sharp increase in refunds paid and weak withholding tax receipts; and $7.8 million less in departmental receipts collected in October 2020 vs. October 2019.

Notable cash collections items for the month of October included: Total personal income tax cash collections of $90.9 million, down $21.9 million or 19.4% year-over-year. The net decrease in personal income tax cash collections breaks down as follows: o Personal income tax estimated payments down $0.4 million or 4.7% year-over-year with this shortfall buttressed by $1.0 million less in final payments, a variance of 6.0%; o Personal income tax refunds and adjustments up $16.5 million or 185.9% year-over-year; o Personal income tax withholding payments in October 2020, $4.0 million less than in October 2019, or 5.7 percentage points below the 1.6% growth rate recorded in FY 2020 for the same period. October FY 2021 sales and use tax cash collections up 6.8% in comparison to October of FY 2020 with total non-motor vehicle receipts $5.7 million higher, including $2.5 million less in meal and beverage sales tax receipts. Motor vehicle use tax receipts (i.e., Registry Receipts) were $1.6 million more in October 2020 vs. October 2019. October 2020 all other general revenue sources cash collections were down $22.4 million relative to October 2019. This decrease is largely attributable to a decrease in estate and transfer tax cash collections of $27.2 million in October 2020 as a result of the receipt of large estate and transfer tax payment(s) of $25.8 million in October 2019. Substantive increases in business corporation tax and financial institutions tax cash collections of $5.4 million help to mitigate the impact of the decreased estate and transfer tax cash collections. Year-over-year departmental receipts cash collections for October are $7.4 million less in FY 2021 than they were in FY 2020 with the largest nominal decrease in miscellaneous cash receipts due to the transfer of $5.0 million from the Office of the Attorney General restricted receipts to general revenues in October 2019. The October 2020 lottery transfer was $36.5 million below the October 2019 lottery transfer due in large part to the advancement of $30.0 million in October lottery receipts in FY 2020. Normally, October lottery receipts would be transferred to the general fund in November as is the case in FY 2021. The rest of the October 2020 shortfall is the result of the impact of limited capacities at the Twin River and Tiverton Casino hotels, which combined transferred $8.5 million less to the general fund in October 2020 vs. October 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/2021.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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