General Revenue fund shows big jump in corporate income taxes

Corporate income tax collections continued climbing in March, while total collections to the General Revenue Fund (GRF) declined following an aberration in the normal flow of personal income tax receipts and ongoing reductions in natural gas revenues.
“The sharp upward climb in corporate income tax collections is extremely encouraging. Our economy is still expanding, although perhaps at a more moderate pace,” said Secretary of Finance and Revenue Preston L. Doerflinger, in an April 9 (Tuesday) compilation sent to CapitolBeatOK.
Collections to the GRF totaled $413.9 million in March, which is $20.6 million or 4.7 percent below collections for March of Fiscal Year 2012, and $61.6 million or 13 percent lower than the official estimate upon which the FY-2013 budget is based.
“These figures are somewhat skewed due to the unusual amount of income tax refunds that reduced revenue from that source in March,” Doerflinger said.
An analysis by the Oklahoma Tax Commissions shows taxpayer refunds in March were $34.2 million higher than they were a year ago. Tax Commission officials say thousands of Oklahoma taxpayers filed for refunds later than usual this year because the Internal Revenue Service delayed the tax filing season before a deal was struck in Washington in January to avoid going over the so-called fiscal cliff.
Tax Commission officials believe the refund season is essentially over now and the state should return to a more normal pattern of personal income tax collections for the final three months of the fiscal year.
“Combined income tax receipts are still running 7.1 percent ahead of last year’s collections through the three-quarter period, and sales taxes are outpacing receipts from a year ago by 5.5 percent,” Doerflinger said.
“The 40 percent jump in corporate income taxes over the same month in 2012 is encouraging, as is the fact that they are up a phenomenal 43 percent through the third quarter of Fiscal Year 2013. It goes without saying that prospering businesses create jobs and are good for the economy.”
Total GRF collections for the first three quarters of the fiscal year are $3.9 billion, which is $49.9 million or 1.3 percent below total collections for the same period a year ago, but $16.1 million or 0.4 percent higher than the official estimate.
“Overall, I remain optimistic that we’ll have another General Revenue Fund surplus at the end of the fiscal year,” Doerflinger said. “Companies are still hiring, and our unemployment continued dropping, from 5.1 percent to 5 percent – a far stronger position than most of the rest of the nation.”
As evidence of Oklahoma’s continued economic strength, Doerflinger pointed to last week’s announcement that General Electric is creating a $110 million global research center in Oklahoma to work with the energy industry on innovations and technological advancement.
“In this environment, it’s important that we press ahead with the governor’s pro-growth agenda, and that includes a responsible personal income tax reduction that will help Oklahoma job recruiters compete with surrounding states,” Doerflinger said. “This is the perfect time to double down on policies that we know are working and turning Oklahoma into an international economic destination. GE told us directly that Oklahoma’s public policy improvements were big contributors to their decision to make such a significant investment here. That’s an incredibly powerful message from an internationally-renowned company that our policymakers need to keep in mind.”
While natural gas prices have improved recently, natural gas receipts are still running behind last year’s collections through the third quarter by $192.9 million or 83.4 percent, while trailing the estimate by $125 million or 76.5 percent. Oil receipts also have slipped substantially compared to 2012.
“Natural gas taxes continued to drag down revenues in March. It’s likely that prolonged subpar natural gas pricing is also negatively affecting overall revenue collections, including sales taxes,” Doerflinger said.
In a potential sign of the early effects of federal budget reductions known as the sequester, motor vehicle purchases are down 8.9 percent so far this year.
“Oklahoma’s thousands of defense and federal workers are likely delaying major purchases, such as cars and trucks, due to all the uncertainty Washington’s gridlock has injected into their lives. As a state, we are monitoring that situation closely, as we have been for months,” Doerflinger said.
Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports. The GRF is state government’s main operating fund and is made up of about 70 revenue sources. It is where all state taxes and fees flow, except for those earmarked or dedicated to specific programs.
Major tax categories in March contributed the following amounts to the GRF:
Income taxes – The total collected from individual and corporate income taxes in the month of March was $165.3 million, which was $11.9 million or 6.7 percent less than prior year collections and $7.4 million or 4.3 percent below the estimate.
Individual income tax receipts of $77.2 million were $37.2 million or 32.5 percent below the prior year and $36.5 million or 32.1 percent below the estimate.
Corporate tax collections contributed $88.1 million to the GRF, which was $25.3 million or 40.3 percent above collections for March of 2012 and $29.2 million or 49.6 percent above the estimate.
Sales tax – The Tax Commission apportioned $145.9 million in sales tax collections to the GRF for March, which was $5 million or 3.3 percent less than the prior year and $10.4 million or 6.6 percent below the estimate.
Gross production tax – Gross production tax collections from March contributed $38.1 million to the GRF after rebates. 
Collections from natural gas accounted for $8.4 million, which was $9.2 million or 52.2 percent below prior year collections and $7 million or 45.3 percent below the estimate.
Collections from gross production oil taxes contributed $29.7 million to the General Revenue Fund. No oil collections were deposited into the GRF in March of 2012. The oil tax contributions were $8.5 million or 22.2 percent below the estimate.
Motor vehicle taxes – Motor vehicle taxes produced $12.7 million from March collections, which was $7.1 million or 35.8 percent less than the prior year and $9.2 million or 42.1 percent below the estimate.
Other Revenue – Other revenue produced $51.9 million for the GRF in March. This amount was $17.1 million or 24.8 percent below the prior year and $19.2 million or 27 percent below the estimate.