January 2012 Income Tax Distribution Declines 9.5% From Prior Year

The Office of the Comptroller released its detail of the January 2012 distribution of local income taxes.  According to the electronic message, the January distribution totals $63.7 million, a 9.5% decline from FY 2011.  This distribution includes the additional filings distribution for tax year 2010 and the interest/penalty distribution for the first half of fiscal year 2012.  From the electronic message:

The additional filings distribution, a reconciling distribution accounting for all tax year 2010 returns posted between November 4 and December 31, 2011, is $42.3 million, a 20% decline from last year.

As with all distributions dealing with small numbers of returns, this distribution can be volatile.  In fact, the number of returns covered by this distribution declined almost 30% even though for the full tax year the number of returns increased 1.4%.

This distribution is the last tax year 2010 distribution; any remaining revenue from tax year 2010 activity will be distributed through the delinquent distributions and, ultimately, the unallocated distribution
for tax year 2010.

Total local income tax liability increased 5.8% in 2010, the first growth in three years following a 2.8% decline in 2009 and a steep 8.4% decline in 2008 (Table 4).  Growth in personal income recovered from a 1.6% drop in 2009–the first ever–to 3.9% in 2010.  And unlike 2008 and 2009, which experienced capital gains declines of 63% and 36%, 2010 saw capital gains increase an estimated 50%, albeit from a much reduced base.

The Interest and penalty distribution increased by $21.4 million, an increase of 23% over 2011.

The growth is spurred in part by the recently-enacted requirement that outstanding tax liabilities be
addressed, whether through full payments or payment plans, before driver’s licenses and motor vehicle registrations may be renewed.

If you have any questions about the January 31 distribution, please contact Judith Oberist of the Revenue Administration Division at (410)260-7606.

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