November Income Tax Distributions Down Substantially

Today, the Office of the Comptroller released its detail of the November distributions of county income taxes.  According to the electronic message, “The November distribution of county income tax revenues totals $861.2 million, a decline of 28.3% [compared to last year’s November distribution].”

The November distribution is historically subject to some variation, as this amount includes not only the latest segment of ongoing receipts from withholding and similar sources, but also reconciles amounts from the recently-closed tax year.  According to the distribution memo:

This distribution reconciles the total amounts distributed for tax year 2008 to the amounts shown on all 2008 tax returns filed by the October 15 extension deadline.  The total adjusted distribution declined by 69%.  As expected with a reconciling distribution, there is substantial variation between the counties.  Several counties saw this distribution fall by more than 90% compared to last year, and both Baltimore County and Talbot County remain over distributed.  The final reconciling distribution for tax year 2008 will be made in January.

Due to the many variables comprising the actual distribution amounts, a more telling indicator may be the data on net local tax liability. That summary is attached below, but reveals a disturbing decline in nearly every county (only Charles County saw any increase at all in this area) — reinforcing the message of local revenue weakness being felt in county revenues. Total county income tax liability for tax year 2009 is down nearly $300 million compared to that for tax year 2008 at the comparable period.

November 2009 local tax liability

If you have any questions about the November 24th distribution, please contact George Freyman of the Revenue Administration Division at (410) 260-7455.

Michael Sanderson

Executive Director Maryland Association of Counties

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