Closing out the first quarter of Fiscal Year 2021, Governor Laura Kelly today announced that the State of Kansas is $108.4 million ahead of its estimate, with $2.3 billion in total tax collections for the fiscal year. That is $515.7 million, or 29.7%, more than the same time last fiscal year quarter.
The increase is due in part to the change in the filing deadline for income taxes, and the increased revenue seen in compensating use tax collections.
“Since I took office, my administration has returned to responsible fiscal practices that have allowed Kansas to successfully remain financially healthy, even as we respond to the COVID-19 pandemic,” Governor Laura Kelly said. “While there is optimism with these projections, we must remain committed to fiscal steadiness, public health, and support our core services like education, infrastructure, and economic development which will enable Kansas to remain on the path to recovery.”
September’s total tax collections were $728.9 million; a $72.8 million increase over the estimate. That is a 2%, or $15.2 million, decrease from the same month of the last fiscal year.
Individual income tax and corporate income tax collections performed better than expected. The state saw a $23.6 million, or 7%, increase in individual income tax collections with $358.6 collected. This increase could be due, in part, to estimated tax payments and economic optimism. Corporate income tax collections were $89.7 million, an increase of $29.7 million, or 49.5%, more than the estimate.
Retail sales tax collections were 1.2%, or $2.4 million, less than the estimate, with $195.6 collected. The decline in retail sales tax collections could be due to some temporary change in consumer habits as the school year started. However, compensating use tax collections continue the trajectory of growth as those collections were $11.6 million, or 34.1%, more than estimated with $45.6 collected. This trend is the effect of changing consumer purchasing habits and increased registrations of out-of-state retailers to collect and remit taxes to the state.
“The impact that the pandemic will have on the economy during the fall and winter months is uncertain at best,” Secretary Mark Burghart said. “That same uncertainty carries over to the anticipated sales and use tax receipts associated with purchases that will be made during the upcoming holiday season.”
The Consensus Revenue Estimating Group will be meeting to evaluate the stability of the Kansas economy and look at the estimates for the rest of the fiscal year. This group is composed of representatives of the Division of the Budget, Department of Revenue, Legislative Research Department, and one consulting economist each from the University of Kansas, Kansas State University, and Wichita State University.