HARRISBURG, DAUPHIN COUNTY (WBRE/WYOU-TV) — Reduced economic activity due to the COVID-19 pandemic and moving of tax due dates has created a significant shortfall in the collection of state taxes during the month of May, Pennsylvania Revenue Secretary Dan Hassell reported on Monday.
According to the Department of Revenue, the commonwealth has collected $2.1 billion in General Fund revenue in May, which was $439.7 million, or 17.3%, less than anticipated. The fiscal year-to-date shortfall of General Fund collections totals $2.6 billion or 8.2%.
While the department estimates that $199.8 million of the shortfall during May can be attributed to moving due dates for various taxes, the remaining $239.9 or nearly 55% of the deficiency is due to reduced economic activity.
“Although we are certainly seeing the effects of the pandemic reflected in the commonwealth’s revenue collections, it’s also important to recognize that a significant portion of the shortfall in May can be attributed to moving several tax deadlines to provide relief to Pennsylvania taxpayers during the pandemic,” Secretary Dan Hassell said in a press release. “We expect to receive much of this revenue in the next fiscal year, which means we’ll have a clearer picture of the pandemic’s effect later in the year.”
While revenue from all tax types came up less than anticipated for May, personal income and corporation taxes saw the largest shortfall at 11.2% each. Year-to-date collections of personal income tax are now $1.5 billion below expectations however, it is $44.8 million above estimates for May.
Inheritance tax revenue is the only tax type currently above estimates at $1 billion for the year, or .4% above expectations. However, the state still received $26 million less than expected from inheritance tax in May.
Sales tax revenue also saw a significant decrease at $282.9 million below expectations for the month. It is down 5.5% for the year.
Pennsylvania did receive more non-tax revenue than expected, totaling $51.9 million for the month and $629.5 million for the year. This is 12.5% above year-to-date expectations. Non-tax revenue includes federal grants.