For May 2021, Kansas tax revenue was 134.7 percent greater than May 2020. Over the eleven months of the current fiscal year, revenue is 27.7 percent higher than at the same point of the previous year. There are important caveats to consider.
Tax reports from the State of Kansas for May 2021 show tax revenues rising from the previous month, and also higher than the same month the prior year. Comparisons to May 2020 must be considered in that the tax deadline for 2020 was changed from April to July. That also shifted a large amount of revenue from fiscal year 2020 to 2021. The tax deadline for 2021 was changed from April to May. The effects of this shift weren’t very apparent in the April data, but for May 2021, individual income tax collections were $492,778,529 (228.2 percent) greater than last May. The only viable explanation for this is the shift in the tax due date. The governor’s press release does not mention this.
Also, after one year of pandemic, we know how it affected tax collections.
When reporting on Kansas tax collections, the comparison is usually made to the estimated collections. Those estimates are revised based on economic conditions affected by the response to the pandemic. To get a feel for the effects of the response to the pandemic, it is best to compare to the same month the prior year. But with shifting tax deadlines, these comparisons are difficult.
(The estimated revenue figures are still important because the state budget is based on them. If the actual revenue is much below the estimated revenue, there may not be enough income to pay expenses.)
For May 2021, individual income tax collections were $708.7 million, up by 228.2 percent from the prior May (keep in mind the timing issues explained above and which our governor failed to mention). Retail sales tax collections rose by 31.0 percent to $227.8 million over the year. Total tax collections were $1,053.2 million, up 134.7 percent from the same month the prior year. A nearby table summarizes.
While the governor failed to mention significant timing issues, Legislative Research wrote this in its report: “While state receipts exceeded expectations by noteworthy margins in several categories, the majority of the month’s surplus came in balance due payments from individual income taxpayers. Kansas conformed to the federally-delayed deadline of May 17 for individuals to file income tax returns and pay any tax owed. Accordingly, the excess receipts does reflect 2020 taxable income of Kansas taxpayers being substantially higher than was anticipated.”
As can be seen in a nearby table, tax revenue for fiscal year 2021 is $1,749.5 million greater than at the same time in the previous fiscal year. Of this, about $1,232.5 million is due to the shifting of individual income tax due dates.
Since the pandemic
The response to the pandemic started in March 2020. We have 12 months of pandemic-affected tax collection data. How does this period compare with the same period one year prior? This is an important question.
A nearby table shows tax collections for two periods of twelve months ending in March 2020 and March 2021. We can easily see the effect of shifting the tax due date from April 2020 to July 2020. Over each period, however, tax collections were nearly the same. The difference of $21.9 million is 0.28 percent. That is the effect of the pandemic on Kansas tax collections for one year.
I’ve also prepared a similar table, but for years ending in May. For the year ending in May 2021, tax revenue is $1,712.0 (24.2 percent) greater than the same period one year prior. But we must remember that the current period contains two income tax deadlines for two tax years. In her press release on the April collections, Kansas Governor Laura Kelly noted the large increase (69.9 percent) over last April: “This increase is due, in part, to businesses having opened back up compared to the same month last year.” While true, this is quite an understatement. The change in income tax deadlines had a far larger effect, perhaps four times as large.
My interactive visualization of Kansas tax revenue has been updated with this data. Click here to use it.
The governor’s press release for this data is at Kansas’ Total Tax Receipts Up $604.6 Million Over Last May. The report from Kansas Legislative Research Department is on this page.