FY 2022 Special Report on Preliminary Revenues Published on Tuesday, October 04, 2022 Providence, R.I. -- The Office of Revenue Analysis (ORA) today released its FY 2022 Special Report on Preliminary Revenues. This report provides a detailed look at FY 2022 preliminary revenues as provided in the Controller’s Preliminary General Fund Revenue Report for FY 2022 and compares these revenues to both the final enacted FY 2022 revenue estimates and the audited FY 2021 revenues. Preliminary FY 2022 Revenues vs. FY 2022 Final Enacted Revenue Estimates The report shows that preliminary FY 2022 total general revenues led the final enacted FY 2022 revenue estimates by $136.9 million or 2.7%. Some notable variances to enacted revenues are as follows: Personal income tax exceeded enacted estimates by $59.5 million, or 3.1%. Almost two-thirds of this variance was due a lower amount of total refunds issued and a higher net accrual. The accrual shifts cash collections to the appropriate fiscal year and is impacted by higher tax receipts and lower refunds. Business corporations tax revenue was $33.5 million, or 13.1%, greater than expected. This surplus was despite a FY 2022 enacted estimate that represented the highest ever business corporations tax estimate – an estimate that already exceeded actual FY 2021 revenue by $53.3 million. Sales and use tax exceeded enacted estimates by $36.4 million, a variance of 2.5%. Other miscellaneous revenue was $7.8 million less than enacted. This is primarily due to the shift of a $5.9 million bond refunding proceeds from FY 2022 to FY 2023. Preliminary FY 2022 Revenues vs. Audited FY 2021 Revenues The report shows that preliminary FY 2022 total general revenues grew compared to audited FY 2021 revenue by $776.3 million or 17.5%. Some notable variances between FY 2022 and FY 2021 revenues are as follows: Total personal income tax revenue grew 23.7% in FY 2022 compared to FY 2021. Final income tax payments, due in April, increased 13.7% in FY 2022. The May 2022 Revenue Estimating Conference assumed that some of this increase was temporary and estimated that FY 2023 final payments would be $180 million lower in FY 2023. Withholding payments increased 9.7% with strong job and wage growth in the state. The net accrual swung from negative $142.2 million in FY 2021 to positive $27.7 in FY 2022. The large negative net accrual in FY 2021 was caused by the shift of the tax year 2019 filing deadline into FY 2021, necessitating the accrual of that revenue out of FY 2021 and into FY 2020. Sales and use tax grew by 12.7% in FY 2022 as consumer spending, especially on goods, remained elevated. This follows 14.9% growth in FY 2021. Business corporations tax revenue increased by 42.6% in FY 2022, driven by stronger estimated and final payments. Lottery revenue increased 28.8% as the state saw a full year of largely normal casino operations. Revenue from insurance companies increased by 21.5% in FY 2022, with growth spread equally between health and non-health insurance companies. Cigarette revenue declined by 6.2%, following growth in FY 2021 of 16.1%. Strong collections in FY 2021 were likely due to a ban of menthol cigarettes in Massachusetts, and FY 2022 collections represent some retrenchment of that growth. A robust housing market led to a 24.4% increase in realty transfer taxes, in line with last year’s growth of 27.6%. The entire report can be found on the Department of Revenue’s web site at https://dor.ri.gov/revenue-analysis/monthly-reports-fy22-fy11/fy-2022. Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at paul.grimaldi@revenue.ri.gov or by phone at (401) 378-1080.