Delayed tax receipts boost July revenue for Kansas
At the start of the new fiscal year, revenue coming into Kansas was close to new estimates from the Consensus Revenue Estimating Group. However, the delay of the tax season to July 15 meant the July receipts were much higher than in previous years.
- Total receipts came just over the mark ($8.7 million more, or 1 percent more than the estimate). Total taxes came in just below ($4.6 million less or 0.5 percent less than the estimate).
Categories that exceeded the estimate by more than $1 million were:
- Sales tax: $16.6 million above
- Compensating use: $14.3 million above
- Insurance premiums: $2.9 million above
Categories that were below the estimate by more than $1 million were:
- Individual income tax: $30.4 million below
- Corporate income tax: $5.2 million below
- Financial institutions tax: $2.3 million below
There are two main takeaways from these updated numbers.
First, because Kansas taxes groceries, the state is not seeing the same drop as other states in sales tax. In fact, the sales tax revenue brought in for July 2020 was higher than this time last year (July 2019) by about $14 million. Similarly, compensating use taxes (out-of-state purchases) also saw an increase from last year to this month, by more than $11 million. This makes sense, as consumers are shifting to online purchases during this time of social distancing.
Second, while individual income tax was below the July estimate, the June revenue in this category was higher than estimated. This likely means that some of what officials thought would be paid in July instead was paid in June. Therefore, June was above the estimate and July below. This trend is also similar with corporate income tax.
Kansas Action for Children will continue to monitor the monthly revenue estimates, especially as Kansas faces an anticipated budget shortfall in the coming months.< Back to the news list