September Income Tax Distribution Increased, Some Counties Remain Overdistributed

The Office of the Comptroller released its detail of the September distributions of county income taxes.  According to the electronic message, “The September distribution totals $50.9 million, an increase of 23% over last year’s distribution.”  It is composed of two components: 1) the adjusted final distribution for tax year 2009; and 2) the first quarter fiscal year 2011 installment of the disparity grant.

The September adjusted final distribution reflects revenues attributable to tax year 2009 claimed on returns processed between July 1, 2010 and September 1, 2010, reconciled to prior distributions for tax year 2009. Coming off a weak 2009 September distribution, this year’s total distribution increased by $9.5 million, or 86.3%. However, eleven counties remain overdistributed, compared to fifteen after the September distribution last year.

This distribution is volatile, as it is a reconciling distribution based on returns filed during a two-month period, and is also affected by taxpayer behavior relating to filing extensions.

Statewide, net local tax liability for tax year 2009 decreased by $71.2 million, or 2.2% (Table 2A). Only Calvert, Charles, Prince George’s and St. Mary’s counties saw marginal increases in local liability, with the majority of growth in Prince George’s County due to a rate increase of 3.2%. The remaining 23 counties and Baltimore City experienced a decline in net liability, including three counties with double-digit percentage losses.

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

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