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August 2021 Revenue Assessment Report available

Providence, R.I. -- The Rhode Island Department of Revenue (DOR) today released its FY 2022 Revenue Assessment Report for August 2021. The Revenue Assessment Report, which is issued monthly, 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 revenue estimates included in the FY 2022 enacted budget signed into law on July 6, 2021 by Governor McKee. The methodology underlying the Office of Revenue Analysis' estimates is contained in Section II. of the entire report.

August Year-To-Date Performance. On a fiscal year-to-date basis, the August 2021 report shows that adjusted total general revenues are ahead of expected total general revenues, based on the FY 2022 revenue estimates included in the enacted budget and the Office of Revenue Analysis' estimation methodology, with adjusted total general revenues $66.6 million more than expected total general revenues, a variance of 11.7%. The strongest driver of this outperformance are excise tax revenues, which are up $27.4 million, or 10.3%, over expectations. Adjusted personal income tax revenues for the fiscal year-to-date through August are $22.6 million more than expected a variance of 11%. General business tax adjusted revenues are $20.2 million ahead of the estimate, or 93.5%, while other taxes adjusted revenues are $1.2 million below expectations, or 10.4% on a fiscal year-to-date basis. FY 2021 year-to-date departmental receipts revenues trail the enacted estimate by $3.9 million or 13.5% and the lottery transfer adjusted revenues through August are $1.5 million, or 4.5%. ahead of the enacted estimate for the lottery transfer.

1. Fiscal Year-to-Date Summary of Findings:

Regarding August year-to-date performance, Director of Revenue Guillermo L. Tello made the following observations: Fiscal year-to-date adjusted total general revenues through August are $66.6 million ahead of expectations based on the enacted estimates included in the FY 2022 budget signed into law on July 6, 2021, a variance of 11.7%, up sharply from July. FY 2022 year-to-date adjusted sales and use tax revenues through August exceed expectations by $27.9 million, or 11.9% likely a reflection of the increased spending capability of consumers as the state's economy operates with no COVID-19 pandemic induced restrictions. Adjusted personal income tax revenues through August are $22.6 million above the estimate, a variance of 11%, with withholding payments $13 million more than expected, or 6.3%, supported by final payments $5.5 million (+75.2%) and estimated payments $4.2 million (+40%) better than their respective estimates. Adjusted business corporation tax revenues through August are $12.2 million more than estimated, a variance of 153.5% and could include some estimated payments made by C-corporations in anticipation of an increased TY 2021 tax liability associated with the taxation of Paycheck Protection Program (PPP) loan forgiveness of more than $250,000. Fiscal year-to-date through August financial institutions tax and insurance company gross premiums tax revenues are a combined $9.4 million greater than expectations, a variance of 165.9%. The lottery transfer revenues in year-to-date FY 2022, and reflecting July gaming activity, are $1.5 million more than estimated, a variance of 4.5%, with all lottery components outperforming expectations. FY 2022 year-to-date departmental receipts, estate and transfer tax and public utilities gross earnings tax adjusted revenues trail their respective estimates by a combined $6.9 million, a difference of 7.9%.

August Monthly Performance. For the month of August, the August 2021 report shows that adjusted total general revenues are ahead of expected total general revenues, based on the enacted FY 2022 revenue estimates, with adjusted total general revenues $44.5 million more than expected total general revenues, a variance of 14.7%. The strongest driver of this outperformance are personal income tax revenues, which are up $23.7 million, or 22.9% over expectations. Excise taxes revenues are $11.2 million ahead of the estimate, a difference of 8.3%. General business taxes adjusted revenues are $10.8 million ahead of the estimate, or 96% while adjusted other taxes revenues for August are $1.1 million less than expected a variance of 19.4%. Departmental receipts adjusted revenues are $1.6 million below expectations, or 10.5% for the month. Finally, since August is the first month for the lottery transfer, there is no difference between the fiscal year-to-date and monthly performance for this revenue item.

2. Month of August Summary of Findings:

Regarding August 2021 monthly performance, Director of Revenue Guillermo L. Tello made the following observations: August adjusted total general revenues are $44.5 million ahead of expectations based on the estimates included in the FY 2022 enacted budget, a variance of 14.7%. Adjusted personal income tax revenues for August exceed expectations by $22.7 million, or 22.9%. Personal income tax revenues are led by withholding payments, which are $19.8 million more than enacted in August, a variance of 19.1%. Personal income tax estimated and final payments adjusted revenues for August are a combined $5.2 million more than expected while monthly personal income tax refunds and adjustments are $1.3 million below the estimate for August. Monthly sales and use tax revenues for August are $12.8 million above the estimate for August based on the enacted FY 2022 revenue estimate for sales and use taxes, a difference of 10.9%. In general business taxes, the August adjusted revenues for the business corporation tax, the financial institutions tax and the insurance company gross premiums tax are, in total, $10.7 million above the enacted estimates for August, a variance of 140.1% Realty transfer tax adjusted revenues for August are $1 million more than expected, or 67.1%, while the lottery transfer for August, reflecting July gaming activity, is $1.5 million above the expected transfer, or 4.5%. Estate and transfer tax adjusted revenues for August were behind the estimate by $2 million or 51.9% and cigarette and other tobacco products excise tax revenues trailed the enacted estimate for August by $1.7 million, a difference of 11.5%.

The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2022.php.

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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