Kansas revenues beat estimates in December, the Kansas Department of Revenue reported today. The state has collected $83.6 million more than projected for the fiscal year. However, officials caution the spike in revenue may be due in part to small business owners overpaying their estimates to capture state and local tax deductions that will be capped in the future by the federal Tax Cuts and Jobs Act.
“This is simply a shift in the timing of tax payments,” Secretary of Revenue Sam Williams said in a press release. “We truly will not know the effect of state and federal tax policy until after the filing deadline in April.”
Individual income tax receipts beat estimates by $87.1 million, and $80.4 million of that was collected in December. Prior to the date release, state officials warned via social media that lawmakers shouldn’t read too much into the increase in tax collections.
https://twitter.com/KS_TaxEconomist/status/946772143877918720
Michael Austin, a tax economist for the state, tweeted, “Policy makers should note: This does not mean income tax revenues are booming/growing like weeds. It’s an early shift of income tax payments.”
When lawmakers return to Topeka next week, they’ll grapple with balancing the budget, which is busted by 2020 despite a $1.2 billion income tax increase adopted last year. They’ll also be tasked with meeting a Court-mandated deadline to craft an adequate and equitable school financing formula.
Kansas budget director Shawn Sullivan cautioned people to temper their expectations on revenues beyond December.
It will be important for us all to temper expectations a bit after seeing the income tax collections for December. #ksleg https://t.co/RhgX7bV8tt
— Shawn Sullivan (@SSullivan66610) December 29, 2017
“It will be important for us all to temper expectations a bit after seeing the income tax collections for December,” he posted.
Sales tax receipts so far this fiscal year are $42 million above last year, and $900,000 above estimates. Corporate income tax is $20.9 million above this time last year, coming in $4.9 million under November revised estimates.
“Contrary to what we see with individual filers, the federal tax reform law may encourage corporate filers to push income into the 2018 tax year to take advantage of the new lower federal tax rate,” Secretary Williams said. “This may be the reason why we see corporate income tax collections falling below estimates so far this fiscal year.”