A combination of tax day moving from April to May, and more than $1.2 billion of $1,400 federal stimulus checks churning the state economy helped West Virginia tax collections for May come in $152.24 million above projections.
May tax collections of $491 million topped estimates by 45%, paced by higher-than-expected income tax and consumer sales tax collections.
Gov. Jim Justice touted the revenue surplus for May during his COVID-19 briefing Tuesday, saying, “We should all be so proud of how West Virginia is minding its store.”
Throughout the pandemic, Justice has downplayed the impact of federal stimulus funds on the state economy. However, in a report to the Legislature, Deputy Revenue Secretary Mark Muchow placed that impact at $5.99 billion, and that was prior to passage of the American Rescue Plan in March, which will inject more than $2 billion into the state economy.
Combined that far exceeds the total state 2020-21 general revenue budget of $4.57 billion.
Pushing the income tax filing deadline from April 15 to May 17 helped state income tax collections come in at nearly double expectations for May, with the $268.95 million accounting for $127.55 million of the revenue surplus for the month.
Sales tax collections of $149.83 million topped projections by $29.33 million, as $1,400 ARP stimulus checks churned the state economy in April. Sales taxes are remitted to the state a month after they are collected.
Higher than projected income and sale taxes helped offset a number of underperforming taxes, as taxes including B&O taxes, tobacco taxes, and severance taxes missed estimates.
Severance tax collections of $23.43 million were $8.26 million, or 26%, below estimates, as natural gas prices and coal production struggle to recovery from pandemic lows.
Year-to-date, with one month remaining in the 2020-21 budget year, which ends June 30, the state has taken in a total of $4.492 billion in tax revenue, creating a year-to-date revenue surplus of $389 million.
That surplus is a factor of the 2020-21 budget year having two income tax filing deadlines — in July 2020 and May 2021 — and the fact that fiscal 2020-21 revenue estimates were reduced by $138 million from 2019-20 budget year projections.