CHARLESTON — State revenue collections came in hot in September, with $505.52 million of tax collections topping estimates by $84.64 million and exceeding September 2020 collections by $80.9 million.
However, year-to-date revenue collections for the first three months of the 2021-22 budget year are down 3.6% from the same point in 2020 — a time when an infusion of federal pandemic stimulus funds was bolstering the state economy.
Through this September, the state has collected $1.194 billion in tax revenue, down $45.21 million from the same point in September 2020.
The downturn is driven by a 16.6% plunge in income tax collections, dropping from $614.49 million for the first three months of the 2020-21 budget year to $512.72 million this fiscal year.
That’s primarily because Tax Day 2020 was postponed from April 15 to July 15 because of the pandemic, pushing the deadline to file state income tax returns into the first month of the 2020-21 fiscal year.
For September, the two major sources of state tax revenue, sales taxes and income taxes, both exceeded estimates and September 2020 collections.
Sales tax collections of $139.08 million exceeded estimates by nearly $11 million and were up nearly $10 million over September 2020 collections of $129.31 million. However, that was down $2.9 million from what the state collected in August. Because sales taxes are remitted to the state a month after they are collected, August taxes represent July transactions, a month when consumer spending improved as the COVID-19 pandemic appeared to be waning.
September collections suggest that consumer spending slowed in August, a month that saw active COVID-19 cases in the state more than triple, as part of an August-September surge that saw a pandemic-record 29,744 active cases on Sept. 17.
Income tax collections of $216.45 million came in $30 million over estimates and $22.47 million over September 2020 collections.
Severance taxes also had a second strong month in September, bringing in $47.47 million, up $13 million over estimates and up 256% over September 2020, when severance taxes brought in just $18.57 million.
Monthly state severance tax collections last topped $47 million in June 2015.
According to a CNBC report, soaring global demand for electricity and surging natural gas prices triggered a rally in thermal coal prices. However, the report noted that economists and energy analysts believe the surge will be short-lived, with prices normalizing later this year.
“We are doing fantastic, and it didn’t get this way by just rolling off a log,” Gov. Jim Justice said in a statement touting the revenue report. “The state is killing it, and I promise you that, as we continue to go forward, we’re going to have more and more goodness to tell.”