The Office of the Comptroller released its detail of the August distribution of local income taxes. According to the electronic message, “The August distribution totals $69 million, a 40% increase from the August 2010 distribution.” This distribution is composed of the following components:
- Balance of the second quarter 2011 withholding and estimated payments
- Final distribution for tax year 2010
The electronic message provides the following information on the second quarter balance distribution, which grew by 37% to $55.6 million, along with specific detail of the components of this distribution (withholding receipts and estimated payments).
The second quarter balance distribution is based on actual withholding and estimated taxes attributable to the second quarter of 2011, less amounts already distributed (projected April/May withholding and estimated payments, which were distributed in June, and projected June withholding which was distributed in July).
Second quarter withholding receipts totaled almost $2.6 billion, growth of 3.5%, a deceleration from the 4.9% growth of the first quarter. Employment in the second quarter fell 0.4%, compared to a 0.7% increase in the first; underlying economic activity, however, may not have slowed quite that much after the snowstorms of February 2010 are accounted for, which depressed activity in the first quarter of 2010, resulting in artificially strong growth in the first quarter of 2011. Estimated payments increased 7.5% for the quarter to $371.9 million. After applying the same percentages for the reserves, local tax and cost of administration that have been used since the 2010 third quarter distribution, local tax for distribution increased 3.1%. Because the taxes already distributed for the second quarter increased by only 1.2%, this reconciling distribution increases substantially more.
The tax year 2010 final distribution totals $13.4 million, an increase of 51%.
This distribution is volatile, since it only accounts for returns processed over a three-week period. Note that only four counties remain over distributed at this point, compared to 13 last year and 16 the year before.
The Comptroller’s Office is expecting the September distribution to be small since there is no longer a four-month filing extension.
If you have any questions about the August 31 distribution, please contact Judith Oberist of the Revenue Administration Division at (410)260-7606.