CONCORD, NH – Business taxes have propped up state revenues for the last 18 months, but in February they produced less money than anticipated by budget writers.
Instead the rooms and meals and insurance tax revenues helped produce a $24.7 million revenue surplus for the shortest month of the year, along with lottery proceeds and $10 million from legal settlements.
For February, state revenues totaled $129.4 million with the $10.6 million legal settlements. The money comes from settlements of $9.5 million from Centene over the Medicaid Management Care program, and $1.1 million from Volkswagen. Those figures are net as 10 percent of the two settlements was deposited in the rainy day fund.
Budget writers estimated $104.7 million would be produced in February. Total revenues were $9.1 million more than collected a year ago for the month.
For the year to date, the state has collected $1.51 billion, which is $191.7 million above plan, and $145.8 million more than collected last year.
Although February is not a big month for business tax collection, the total for the month is $24.5 million, which is $3.4 million below estimates, and $4.9 million below last February.
According to the Department of Revenue Administration, the deficit for the month is due to larger than anticipated refund requests, but add that indicators are positive going forward.
“Business taxpayers are signaling an expectation of higher current tax period liability, as demonstrated by an increase in estimated tax payments of 17 percent as compared to February of 2021,” the agency said, “which follows January tax estimate payments that were also up compared to the previous January.”
For the year to date, the state has collected $584.9 million in business taxes, which is $91.5 million more than estimated and $121.3 million more than a year ago.
Business tax collections are much higher in March, April and June.
The rooms and meals tax continued to rebound after the pandemic’s negative impact last fiscal year.
The levy produced $18.6 million in February, which is $3.7 million over estimates and $4.3 million less than a year ago.
The DRA said the figures represent a 2.5 percent increase in meals and 35.7 percent increase for hotel activity.
For the year to date, revenues are $213.8 million, which is $45.3 percent above plan and $1.3 million more than a year ago.
The insurance tax produced $11.8 million for February, which is $6.8 million more than estimates, and $7.9 million more than a year ago.
“The increase in revenue are primarily due to premium tax payments received early, as well as in increase in the tax base and fees,” according to the DRA
For the year to date, the tax has produced $31.2 million, which is $11.8 million above estimates, and $10.8 million more than a year ago.
The real estate transfer tax continued to perform better than anticipated producing $13.9 million, which is $3.6 million more than estimates and $2.7 million more than a year ago.
The number of transactions were down 8.9 percent over a year ago, but the values were up 21.4 percent.
For the year to date, the levy has produced $165.5 million, which is $23.6 million more than estimates and $23.8 million more than a year ago.
Lottery revenues were $14.5 million for February, which is $3 million more than estimates, but $5.2 million less than a year ago.
DRA officials say the increase is primarily due to sports betting.
For the year to date, lottery revenues are $87.4 million, which is $12.9 million more than estimated and $1.6 million more than a year ago.
Other revenue sources above plan for the month, were the tobacco, interest and dividends, beer and utility property taxes, and court fines and fees and security fees, while the communications tax was below estimates for the month.
The highway fund produced $19.6 million in February, which is about $1 million less than estimates, but $800,000 more than a year ago.
For the year to date, the fund has collected $169.7 million, which is $5.5 million more than estimates and $2.8 million more than a year ago.
The Fish and Game Fund produced $1.2 million for the month, which is $300,000 more than estimates and a year ago.
For the year to date, the fund collected $9.9 million, which is $1 million more than estimates and $1.9 million more than a year ago.