Florida tax revenue continues to exceed expectations

(The Center Square) — Tax revenue in the Sunshine State is exceeding projections, according to a recent report from the Office of Economic and Demographic Research.

General revenue collections for April showed a gain of $384.8 million, 7.9% higher than what was forecast by the General Revenue Estimating Conference held in March with 72% of that revenue from corporate income tax.

Revenue reports in Florida, unlike other states, are a month behind. The latest report released in April details how after adjusting total sales tax collections for local taxes and distributions, audits, bad checks and communications services tax — collections were 3% more than the estimate for the month.

Florida collected an additional $96.4 million in total sales tax for April. According to the report, this was due in part to several factors, including a "continuing technical shift between estimated payments and unpaid liability," as well as recovery and rebuilding efforts associated with hurricanes Ian and Nicole, which saw $25.1 million added to the month’s total. Total recovery and rebuilding efforts will cost around $560.4 million, however, the EDR says in the report that estimates are understated.

The report states that additional revenue for April is partly due to the rise in inflation, which results in higher consumer prices. It also notes that if inflation continues to persist, consumers will begin spending their income on non-taxed necessities like food — causing a downward turn in sales tax revenue. Food prices have risen 7.1% more than the past 12 months.

In April, consumer nondurable goods gained $1.4 million more than the estimate for the month, while tourism took a loss of $2.6 million — 0.3% lower than estimated. The building sector gained an additional $1.5 million, 0.6% more than its projections, and business gained $41.7 million — 6.1% more than its estimate for April.

Corporate income tax gained $277.7 million for April, 31.7% higher than projected. Earnings on investments soared 157.1% more than its estimate, gaining $49.5 million, while intangible taxes gained $9.4 million, a 34.6% increase. Article V fees and transfers gained an additional 10.6% for April, collecting $1 million in revenue, while documentary stamp tax gained $7 million — a total of 7.8% more than was estimated.

Coming in negative for April were eight revenue sources including corporate filing fees, insurance taxes, service charges, highway safety fees, and beverage taxes.

The biggest losses came from corporate filings fees, 27.9% under its estimate, losing $30.5 million for April. According to the report, this was partly a timing issue with March estimates. Insurance taxes lost a total of $20.3 million, 27.9% less than the estimate for the month, and services charges, highway safety fees and beverage taxes lost an average of $4.8 million, falling below estimates by at least 10.9% for April.

Tobacco tax, county Medicaid shares and severance taxes lost between $100,000 and $500,000 in April. In total, these revenue sources generated a loss of $65.4 million.