April Tax Revenues Fall By 36%

Georgia collected less than 2/3 of the revenue it did in the same month one year ago. Shuttered businesses, a statewide shelter-in-place order, and an extension for tax filing deadlines moved until July all contributed to the sharp drop in April revenues. At the same time, expenses for direct Covid-19 response as well as skyrocketing unemployment benefit claims are placing a drain on state coffers.

The details on state tax revenues for the month, as released by the Governor’s office, are as follows:

Atlanta, GA – The State of Georgia’s April net tax collections totaled nearly $1.84 billion for a decrease of $1.03 billion, or -35.9 percent, compared to April 2019 when net tax collections totaled $2.87 billion. Year-to-date net tax collections totaled $19.23 billion for a decrease of nearly $680 million, or -3.4 percent, compared to the previous fiscal year (FY) when net tax revenues totaled $19.91 billion.

Changes within the following tax categories for April are largely attributable to the economic impact of the COVID-19 pandemic. In particular, the shifting of payment deadlines related to Motor Vehicle, Corporate Tax, and especially Individual Income Tax have had a profound impact on typical state revenue collection activity, resulting in the dramatic reduction of April and year-to-date FY 2020 tax revenues as outlined below.

Individual Income Tax: Individual Income Tax collections for April declined by $732 million, or -46.2 percent, down from April 2019 when net Individual Tax revenues totaled roughly $1.58 billion. Individual Income Tax refunds issued – net of voided checks – decreased by $253.6 million or -44.3 percent. Individual Income Tax Return payments decreased by $830.9 million, or -88.9 percent, from last year. Individual Withholding payments for the month were up $15.4 million, or 1.6 percent, over last year. All other categories, including non-resident income tax payments, were down a combined $170.1 million.

Sales and Use Tax: Gross Sales and Use Tax collections totaled $995.7 million for the month, which was a decrease of roughly $107 million, or -9.7 percent, compared to April 2019. Net Sales and Use Tax declined by $82.4 million, or -14.3 percent, compared to FY 2019, when net sales tax totaled $574.6 million. The adjusted Sales Tax distribution to local governments totaled $491.4 million for a decrease of $33.4 million, or -6.4 percent, from April 2019. Lastly, Sales Tax Refunds increased by nearly $8.8 million compared to FY 2019.

Corporate Income Tax: Net Corporate Income Tax collections decreased by nearly $219.1 million, or -70.6 percent, compared to FY 2019 when net Corporate Tax revenues totaled $310.4 million. Corporate Income Tax refunds – net of voids – decreased by $11.6 million, or -51.4 percent, from last year. Corporate Income Tax Estimated payments received were down $122.7 million or -64.5 percent. Corporate Income Tax Return payments decreased by $99.4 million or -78.3 percent. All other Corporate Tax types, including S-Corp tax payments, were down a combined $8.6 million.

Motor Fuel Taxes: Motor Fuel Tax collections increased by $80.3 million, or 50.9 percent, compared to FY 2019 on the strength of larger than ordinary, one-time settlement payments resulting from ongoing audit activities.

Motor Vehicle – Tag & Title Fees: Motor Vehicle Tag & Title Fees fell by roughly $16.3 million, or -43.4 percent, in April while Title Ad Valorem Tax (TAVT) collections declined by $22.7 million, or -30.7 percent, compared to FY 2019.

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xdog
xdog
24 days ago

Not surprisingly, the month showed a healthy bump for alcohol and tobacco taxes, and if the state ever sees fit to legalize cannabis I predict that product will hold up well in depressions too.

Do you know the story on the ‘larger than ordinary, one-time settlement payments resulting from ongoing audit activities’ increase in fuel taxes?

Dave Bearse
Dave Bearse
22 days ago
Reply to  Charlie

Small potatoes, but I anticipate I-75 toll roads are losing money, i.e. tolls not even covering operatino costs.

Ellynn
Ellynn
24 days ago

Quick ‘slightly off topic but was reference in the pos’t question. If a recall correctly, in the fall of 2009 the state had to borrow funds to help pay the unemployment insurance claims. I know the money was eventually repaid to the federal coffers. Has the Georgia UI funding process been changed/adjusted/fixed after the 2009 shortfall in case of a future recession? If not will the state be able to get a loan from the federal government or need to raise the collection level from business if we exceed the able of the fund to pay claims?

bethebalance
bethebalance
23 days ago
Reply to  Charlie

I’m a little unclear on what you’re saying would be irresponsible- to staff up DoL? If that is what you’re suggesting, I’d say you’re right, up through early to mid-March. The first declaration of emergency was in mid-March, and around March 20, 2020, the Senate first starting getting wind in its sails about the CARES Act. It would be interesting to see a further juxtaposition between DoL staff hires and the other timelines of the pandemic. Sure, hiring and onboarding takes time, but over the course of 4 to 6 weeks, there could have been significant progress if due attention… Read more »

bethebalance
bethebalance
23 days ago
Reply to  Charlie

Oh, I’m not saying it would have been easy. And I don’t dispute the difficulty of the volume, or the circumstances. And I don’t think there would have been a 100% ability to get to handle every claim flawlessly- that’s certainly unrealistic. But I am very curious about what was done because as difficult as it was, it was also foreseeable for a number of weeks, and those weeks could have been used for resiliency. Maybe it wouldn’t have helped too much to hire 50 to 75 extra people. Maybe it would have diverted needed resources. Maybe it was too… Read more »

Brett
Brett
23 days ago

Postponing 2019 pre-pandemic taxes due to July 2020 accounts for the entire YTD revenue decline. Had 2019 income taxes due been paid in April (presuming flat revenues versus prior year), YTD total state revenues would be up nearly $300 million.

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