August Income Tax Distribution Declines 34.6% From Last Year

Today, the Office of the Comptroller released its detail of the August distribution of county income taxes.   According to the electronic message:

The August local income tax distribution totals $49.4 million, a 34.6% decline from last year’s distribution; all but three counties saw a decrease.  This distribution includes two reconciling payments:

  • the second quarter balance distribution, which is based on actual withholding and estimated taxes attributable to the second quarter of 2010, less amounts already distributed
  • the final distribution for tax year 2009, which is volatile since it only accounts for returns processed over a three-week period, from June 8 through the end of the fiscal year (June 30)

Second quarter withholding receipts totaled just under $2.5 billion, an increase of 3.2%, as the Maryland unemployment rate stabilized.  However, actual estimated payments dropped 7.9% to $346.1 million.  After accounting for the $739.5 million distributed in May and June and the municipal share, the balance due of $40.5 million represents a decline of 43.9% from last year.  The decline indicates that because the April, May and June withholding and estimated payments projection was closer to actual receipts this year than in previous years, most counties received their share of revenue earlier in calendar year 2010 than they did in calendar year 2009.  The total second quarter distribution is $768.9 million, a decrease of 4.4% over 2009.

Finally, four counties saw an increase in local tax liability between tax years 2008 and 2009, led by St. Mary’s and Prince Georges counties. However, the increase in Prince Georges was mainly due to a rate increase from 3.1% to 3.2%.

If you have questions regarding the August distribution, please contact George Freyman of the Revenue Administration Division, at 410-260-7455.

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