California State Controller John Chiang offers this daily tax tracker to follow personal income taxes, sales and use taxes and corporate taxes -- the three major sources of revenue for the State.
The site will be updated regularly throughout each business day. Preliminary posts use dollar figures from tax administration agencies, while the following day the Controller will post reconciled (actual cash) figures. The latest figures are always available via direct download. Preliminary sales tax figures, along with personal income tax withholdings will be available by 10:30 a.m., followed by total personal income and corporate tax receipts, along with final sales tax numbers between 1:30 and 4:00 p.m. the same business day.
The chart on the right of this screen tracks the cumulative total of income, sales and corporate tax and compares it against estimated benchmarks for the month.
They may have been procrastinating, but California taxpayers came through on April 15th as they paid $1.0 billion in estimated and final tax payments. With refunds and withholding taxes for the day offsetting each other, net personal income tax (PIT) receipts also equaled $1.0 billion. This compared with last year's April 15th figure of $850 million.
Yesterday's tax surge put the State's cash tally in terms of its three major revenue sources -- PIT, corporate income, and sales taxes -- at about $67.7 billion for the fiscal year to date (July 1, 2013 through April 15, 2014). This is $1.6 billion more than projected based on the Governor's Budget released in January.
PIT is running about $1.0 billion, or 2.2%, above projections. Corporate tax revenues are more than $700 million, or 16.8%, above expectations. Retail sales are the only category still behind forecasts, although the 0.7% miss amounts to only about $100 million.
Also worth noting: Taxpayers pay a rising tax rate on incremental increases of income. Because of the rising rates, high-income taxpayers will not pay the topmost tax rate on all their income today. Consider for example, the effective tax rate paid in 2011 by the 671,290 taxpayers with adjusted gross incomes above $200,000.(Note: 2011 reflects a tax year prior to the imposition of the Proposition 30 levy.) Of these high-income taxpayers, 334,834 (50 percent) paid at a tax rate between 5.0 percent and 6.9 percent. Another 228,388 (34 percent) paid between 7.0 percent and 8.9 percent. Fewer than 25,000 taxpayers (4 percent) paid at a tax rate exceeding 8.9 percent. At the other end of the scale, 83,549 high-income taxpayers (12 percent) paid a tax rate of between 0.0 percent and 4.9 percent.
Not all who file shall pay. Many people filing tax returns today will escape having any tax liability. They may qualify for refundable credits that exceed their tax liability. Or they may find that after making various tax adjustments (such as deductions and credits), their entire tax liability has been eliminated.
Consider that in 2011, 15.0 million resident taxpayers filed returns, but 6.5 million (43 percent) had no tax liability. Nearly all of the non-taxable returns were filed by those reporting adjusted gross incomes (AGI) of less than $50,000. Comparing the returns by AGI, the nontaxable returns are predominately among the lower AGI classes.
- Of the 9.5 million returns reporting AGI less than $50,000, 6.1 million (65 percent) had no tax liability.
- Of the 3.1 million returns reporting AGI between $50,000 and $100,000, 300,000 (10 percent) had no tax liability.
- Of the 1.7 million returns reporting AGI between $100,000 and $200,000, less than 11,000 (1 percent) had no tax liability.
- Of the 700,000 returns reporting AGI exceeding $200,000, less than 2,400 (0 percent) had no tax liability.
Today, in case anyone needed the reminder, is income tax day. We expect more than 8 million resident taxpayers will have liabilities due today. Most tax liabilities will be less than $1,000.
According to the Franchise Tax Board’s latest annual report, 8.5 million resident taxpayers had a liability in 2011. Of those, 3.8 million (45 percent) had liabilities of up to $1,000, and another 1.3 million (15 percent) paid between $1,000 and $2,000. For 2.0 million (23 percent) other taxpayers, tax liabilities ranged from $2,000 and $6,000. The rest, about 1.4 million (17 percent), had liabilities exceeding $6,000.
With many taxpayers struggling until the end to meet the filing deadline, the heaviest cash flows can be expected tomorrow and Thursday. Last year, reflecting the impact of capital gains, an improving economy, and higher tax rates, April tax receipts peaked on the 16th of the month at $2.7 billion. This number includes withholding taxes filed by companies in addition to estimated and final tax payments but does not reflect the impact of refunds. With tax rates holding steady during the past year, this year's peak for the month is likely to be much less than last year, but it is still expected to be close to or surpass $1.5 billion.
April 14 has begun the week with another $450 million in total tax collections, according to preliminary figures. This would mark the third day this month that revenue mark has been breached, although revisions due out early tomorrow morning could alter the figure either upward or downward.
So far this month, personal income tax and sales tax receipts appear to be running somewhat below expectations for April, while corporate taxes are consistently running above projections. A clearer picture will come into view as this week proceeds with the deluge of personal tax filings.
Meanwhile, although sales taxes pale in comparison to California's collection of income taxes, they are still a significant source of revenue and also an important barometer of the overall economy. This morning’s positive report on retail shopping is thus good news.
National retail sales jumped 1.1% between February and March, which was the best performance in 1-1/2 years. Although some of this reflected a weather-related bounce not relevant to our state, the general upswing suggests that consumers are more optimistic about the economy and ready to spend.
Consumers were spending more on items across the board. These included spending for cars, furniture, sporting goods equipment, restaurant meals, and merchandise ordered online. If the job market continues to gradually improve, Californians should keep shopping and help support the State's cash flow.
Adjusted gross income (AGI) is not spread evenly across the state.
According to FTB statistics for 2011, Marin County had the highest median AGI -- just over $52,000 -- among counties.
Over 118,000 taxpayers filed returns from the county. San Mateo and Santa Clara Counties ranked second and third in income, with a median income of nearly $50,000 and $48,000 respectively. Returns from these two South Bay counties totaled just over 1.1 million.
Los Angeles County, with over 4 million returns and a median income of about $30,000, ranked 38th in income among the state's 58 counties. Imperial County’s 60,000 returns reported the lowest median AGI -- just above $23,000 and less than half the income of Marin, San Mateo or Santa Clara Counties.
Who pays the income tax? There are many ways to answer this question.
According to FTB's annual report in 2011, there were 2.4 million taxpayers with adjusted gross income (AGI) exceeding $100,000. They accounted for 15.8 percent of the total 15.0 million residential taxpayers. Cumulatively, they reported $592 billion of the $982.1 billion (60.3 percent) in the year's AGI. Given the State's tax structure, these same taxpayers had $37.2 billion of the $43.9 billion (84.6 percent) of the year's residential income tax liability.
Bleary-eyed Californians will be pulling all nighters this week to complete their tax returns. Their efforts will be critical to the State’s cash coffers. Last year, the five days surrounding the April 15th tax deadline netted $8.1 billion. This represented 65% of the total collected for all of April. Some of last year’s tax surge reflected the impact of higher tax rates approved by voters in November 2012, which were made retroactive to the beginning of the year.
With no change in tax rates during the past year, this year’s personal income tax take is likely to trail last year's. Nevertheless, this will again be a vitally important few days for the State’s finances.
For the 2013 tax year, FTB will likely process roughly 15 million returns from residents. For a little perspective, for the 1947 tax year FTB had 784,709 residents' returns with a liability of $45.4 million. In 2011 (the last year for comparable data), FTB had 15,042,359 returns with a liability of $43.9 billion. That represents an average annual growth rate for returns of nearly 5 percent and for liability of over 11 percent.
