$2.0 Billion Mark Passed

Although the numbers are still preliminary, April 10^th saw California’s bank account for the month-to-date growing $2.1 billion.  This appears to be a fair start to the monthly forecast of $13.1 billion as the heavy inflow will take place during next week.

Personal income tax receipts are key to California’s fiscal picture.  Through April 10^th, they have reached $1.9 billion.  The forecast for the April total is $10.9 billion.

Retail Tax Receipts Catch Up

Tax receipts are recorded net of various refunds that are paid and retail taxes are no exception.  This month refunds were recorded much earlier than expected and have weighed on the total.

The Board of Equalization (BOE) issues refunds on a daily basis to retailers as they reconcile their remittances.  When customers return merchandise, for example, tax receipts are returned to the merchant.

Periodically, refunds issued on a given day can exceed revenues by a large margin.   Such was the case on April 2 in contrast with last year on April 10.  Now, with at least preliminary numbers available this month for the 10th, comparisons came be made.  The result?  April so far is running virtually identical to last year with refunds exceeding payments by about $86 million.  The big refund bulge is now over and we should generally see positive net cash inflows for the balance of the month

April Tax Collections Reach $1.7 Billion

During the first nine days of April, California took in a net $1.7 billion of tax receipts, dominated by $1.8 billion of personal income tax receipts ("net" totals refers to total reciepts minus refunds paid out to taxpayers).  So far this month, sales tax refunds have outpaced tax receipts, but that performance is expected to change before month-end.

For April as a whole, personal income tax receipts will be the dominant force, accounting for more than 80% of the state’s total tax receipts as individuals file their final returns and make their estimated tax payments.