Providence, R.I. -- The Rhode Island Department of Revenue released its FY 2016 Revenue Assessment Report for February 2016 today. The Revenue Assessment Report, which is issued on a monthly basis, 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 enacted in the FY 2016 budget. The methodology underlying the Office of Revenue Analysis' estimates is contained in the report.
1. February Year-To-Date Performance. On a fiscal year-to-date basis, the February 2016 report shows that adjusted total general revenues are ahead of expected total general revenues, based on the revenue estimates adopted at the November 2015 Revenue Estimating Conference and the Office of Revenue Analysis' estimation methodology, with adjusted total general revenues $38.0 million more than expected total general revenues, a variance of 1.9 percent. The principals of the November 2015 Revenue Estimating Conference revised the estimate of FY 2016 total general revenues up by $52.4 million.
2. February Monthly Performance. Adjusted FY 2016 total general revenues exceeded expected FY 2016 monthly total general revenues based on the revenue estimates adopted at the November 2015 Revenue Estimating Conference and the Office of Revenue Analysis' estimation methodology by $6.3 million or 3.7 percent.
Regarding February year-to-date performance, Director of Revenue Robert S. Hull made the following observations: • Fiscal year-to-date revenues through February modestly exceeded expectations. • While still ahead of the expected performance, the spread between adjusted and expected personal income tax revenues decreased by $6.6 million from the January 2016 report. • Adjusted personal income tax revenues were driven by a solid increase in estimated personal income tax payments as well as materially lower refunds than expected.
Regarding refunds, for fiscal year-to-date 2016 the Division of Taxation: • has issued 174,201 refunds as of the end of February 2016 versus 170,005 in 2015, an increase of 2.4 percent; • implemented its Integrated Tax System for personal income tax in November 2015 and all returns are being processed through the new system; • estimates that the timing of what refunds are paid is due to incremental process changes due to enhanced review for fraud and prevention of identity theft and enhanced quality assurance brought about by implementation of its new Integrated Tax System; • Adjusted lottery transfer revenues exceeded expectations by $11.1 million or 5.5 percent. • Adjusted personal income tax withholding revenues trailed expectations by $4.6 million or 0.6 percent. • Adjusted sales and use tax revenues fell short of expectations by $1.6 million, or 0.2 percent. • Adjusted business corporations tax revenues exceeded expectations by $10.8 million or roughly 28 percent.
Regarding February monthly performance, the director made the following observations: • Adjusted total general revenues in February exceeded expectations, although the State's two largest revenue streams, personal income tax and sales and use tax fell below expectations for the month; • Adjusted personal income tax withholding payments exceeded expectations for the month by 2.2 percent; and • The primary driver of the shortfall in personal income tax revenues for the month was refunds and adjustments which surged ahead of expectations by 19.3 percent or $12.9 million.
Regarding refunds, the Division of Taxation: • has issued 145,256 refunds for the month of February 2016 versus 119,875 in 2015, an increase of 21 percent; and • estimates that the increase in refunds paid in February is due to both the release of refunds from prior months and incremental process changes due to enhanced review for fraud and prevention of identity theft and enhanced quality assurance brought about by implementation of its new Integrated Tax System.
Additionally, Lottery transfer revenue materially outperformed the estimate by 22.4 percent or $6.1 million for the month, driven by sales related to the record $1.6 billion Powerball Jackpot in January and the relatively mild winter experienced in the same month when compared with January in previous years.
The entire report can be found on the Department of Revenue's web site, www.dor.ri,gov, under the Revenue Analysis header on 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) 574-8766.