January Income Tax Distributions Greater Than Prior Year

The Office of the Comptroller released its detail of the January distributions of county income taxes.  According to the electronic message, the January distribution totals $70.4 million, an increase of almost 60% over last year’s distribution.

The additional filings distribution (all returns posted between November 1 and December 31, primarily late-filed returns) is $53.0 million, twice last year’s distribution.  As this distribution deals with a relatively small number of returns, less than one-half of one percent of the returns filed for a tax year, it can be volatile.  In some counties a very small number of returns had a large impact on this distribution.  At this point, only two counties remain in an overdistributed position, compared to four last year.

After an 8.4% decline in 2008, total local income tax liability declined a further 2.8% in 2009.  Total personal income in Maryland increased 3.6% in 2008, the slowest growth since 1958, although very similar to the 3.7% growth in 2002.  Personal income growth slowed further in 2009, with growth of only 0.4%, the worst on record.  The steeper decline in 2008 was attributable to a 63% drop in capital gains; capital gains fell an estimated 40% in 2009, although the net loss was only $2.3 billion compared to the $9.8 billion lost in 2008.  The 2008 decline was also affected by the increase in the personal exemption, which shaved nearly two percentage points from the growth of net taxable income that year.  The drops in local income tax liability for these years are very similar to the declines in net taxable income, which fell 7.0% in 2008 and a further 3.0% in 2009.

Additional information provided by the Comptroller’s Officer includes,  the interest and penalty distribution, the number of returns for November and December, and the number of returns for the whole year.

If you have questions regarding the January distribution, please contact Judy Oberist of the Revenue Administration Division, at 410-260-7606.

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