General Fund revenues increased 21.9 percent in January from the previous year, according to Gov. Glenn Youngkin. January is a significant month for revenue collections. Besides the normal monthly payroll withholding and sales tax collections, estimated payments from individuals are due. On a fiscal year-to-date basis, total revenue collections rose 15.4 percent through the end of the month, ahead of the forecasted 4.2 percent growth.
“The continued growth in state government revenue shows once again that hardworking Virginians are being overtaxed,” said Youngkin. “With this report, and as the General Assembly continues its work this Session, it is clear we must deliver meaningful tax relief for Virginia families. We can do that while also providing a record investment in public education and fully funding our law enforcement heroes.”
He added, “It is time to start growing jobs and preparing a workforce to take them. What we cannot do, however, is continue to conflate record revenue with economic success for Virginians. I am concerned about lagging job growth and record low labor participation, particularly at a time when we want to get people back to work.”
“For the first seven months of the fiscal year, collections have been significantly better than expected – especially in individual estimated payments, sales/use taxes, and payroll withholding,” said Secretary of Finance Stephen Cummings. “Collections of payroll withholding taxes grew 17.5 percent for the month. Collections of sales and use taxes, reflecting December sales, rose 19.9 percent in January.”
The combined December and January receipts, representing the bulk of the holiday shopping season, was 18.3 percent above the same period last year. Also, December and January are significant months for collections of nonwithholding and receipts can be distorted by the timing of payments. Taxpayers had until January 18th to submit their fourth estimated payment for tax year 2021 and some of these payments are received in December. Receipts of nonwithholding for the two-month period of January-December increased 27.2 percent from last year. Collections of corporate income taxes were $61.5 million in January, compared with receipts of $49.3 million in January of last year.
Year-to-date, withholding collections grew 11.4 percent ahead of the same period last year and above the annual estimate of 5.9 percent growth. On a year-to-date basis, sales tax collections have risen 15.7 percent, well ahead of the annual estimate of a 6.3 percent increase. Nonwithholding collections for the first seven months of the fiscal year grew 8.1 percent, ahead of the annual estimate of a slight decline.