Legislative Budget Office of the Legislative Service Commission
3.8 million. On the other hand, most of the remaining GRF taxes experienced negative
variances through December 2019: the financial institutions tax (FIT) had a shortfall of
12.5 million, the majority of which occurred in the October-December period; the three
utility-related taxes (the kilowatt-hour excise tax, the public utility tax, and the natural gas
consumption tax) were collectively $9.2 million below projections; the negative variance for the
personal income tax (PIT) was $2.8 million; the alcoholic beverage tax was $2.6 million below its
anticipated level; and the cigarette and other tobacco products tax was $2.0 million short of
For the month of December 2019, GRF sources of $3.20 billion were $284.9 million (9.8%)
above estimate. Though GRF tax sources posted a small negative variance of $1.8 million (just
.1%), federal grants were $283.7 million above estimate (27.9%), reversing a timing-related
shortfall of $223.7 million in November 2019. Also, nontax revenue was above estimate by
2.9 million (189.3%). No GRF transfers in occurred or were anticipated in December. Regarding
GRF tax sources, a negative variance of $34.7 million for the sales and use tax partially offset a
positive one of $35.6 million for the personal income tax; and a CAT shortfall of $1.2 million
cancelled out a positive variance of the same amount for the cigarette tax. The collective receipts
for the utility-related taxes were on target relative to the cumulative estimate, and combined
receipts for the insurance taxes were $1.5 million above estimates. Refunds for the FIT totaled
9.0 million when they were estimated to be $4.2 million, resulting in a negative variance of
4.8 million for the month.
As shown in Table 2, FY 2020 GRF sources through December were $719.7 million (4.3%)
above sources in the corresponding period in FY 2019. Except for transfers in which was slightly
below its FY 2019 level, revenue from the other GRF categories grew relative to receipts in the
previous year. First-half receipts for federal grants, tax sources, and nontax revenue increased
367.0 million, $313.8 million, and $39.5 million, respectively. Growth in GRF tax revenue was
mostly due to the sales tax ($253.1 million), the PIT ($58.0 million), and the CAT ($39.3 million).
Receipts fell for the utility-related taxes ($24.4 million) due to lower energy prices this year, and
the cigarette tax ($17.8 million), which is the normal trend.
Sales and Use Tax
The sales and use tax has been above estimate throughout FY 2020. First-half receipts to
the GRF totaled $5.59 billion, an amount $79.5 million (1.4%) above estimate, with both the
nonauto and the auto portions of the tax above projections. Total sales and use tax revenue was
also $253.1 million (4.7%) above receipts in FY 2019 through December. For the latest month,
however, receipts of $958.4 million for this GRF source were $34.7 million (3.5%) below estimate
due to a shortfall from the nonauto sales and use tax. Sales and use tax receipts were essentially
flat relative to revenue in December 2018. For analysis and forecasting, revenue from the sales
and use tax is separated into two parts: auto and nonauto. Auto sales and use tax collections
generally arise from the sale of motor vehicles, but auto taxes arising from leases are paid at the
lease signing and are mostly recorded under the nonauto tax instead of the auto tax.
3 A negative variance in FIT collections through the first half of the year is not uncommon.
Annual FIT returns are due in October, so receipts in the second fiscal quarter reflect a reconciliation
between prior estimated payments (typically January, March, and May) and final reported tax liability. A
first-half negative variance means the volume of refunds was higher than expected.
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