Economic Trends Continue in SeptemberTue, 06 Oct 2020 08:44:07 CDT
Three of the state’s four major revenue streams show contraction in September’s Gross Receipts to the Treasury report, similar to the picture seen in total collections during the past 12 months, State Treasurer Randy McDaniel announced on Tuesday.
September receipts from all sources total $1.15 billion, down by almost $8 million, or just less than one percent, from September of last year. Over the past year, gross receipts total $13.26 billion, down by some $468 million, or 3.4 percent, compared to the previous 12-months.
“Considering the major challenges the state faces, Oklahoma’s economy has been weathering the pandemic-driven downturn relatively well,” said Treasurer McDaniel. “We still have reasons for concern in the months ahead, but the perseverance reflected in the September report is encouraging.”
Gross receipts from combined sales and use tax, oil and gas production, and motor vehicle taxes are down by a total of $40.2 million. The extraction tax on oil and gas accounts for the lion’s share with a $27.4 million reduction.
The gross production tax, the state’s severance tax on oil and natural gas, is well below collections from the prior year for a thirteenth consecutive month. Oil and gas prices remain depressed, while drilling activity and oil field employment levels are at historic lows.
Combined individual and corporate income tax receipts are the lone bright spot, up by $21.9 million, or 5.1 percent, for the month. However, the influx of withholding taxes from unemployment payments appears to be having a noteworthy impact on the bottom line.
Other economic indicators
The Oklahoma Business Conditions Index in September remained above growth neutral for a fourth month, following three months of numbers indicating economic contraction. The September index was set at 58.6, down from 61.8 in August. Numbers above 50 indicate economic expansion is expected during the next three to six months.
The unemployment rate in Oklahoma was reported as 5.7 percent in August, down from 7.1 percent in July. The seasonally adjusted number of Oklahomans listed as jobless was reported as 104,800, according to figures released by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate was listed at 8.4 percent in August.
Compared to gross receipts from September 2019, collections in September 2020 showed:
• Total September 2020 gross collections are $1.15 billion, down $7.9 million, or 0.7 percent.
• Gross income tax collections, a combination of individual and corporate income taxes, generated $452.7 million, an increase of $21.9 million, or 5.1 percent.
• Individual income tax collections are $346.4 million, up by $8.9 million, or 2.6 percent.
• Corporate collections are $106.4 million, an increase of $13 million, or 13.9 percent.
• Combined sales and use tax collections, including remittances on behalf of cities and counties, total $457.8 million – a reduction of $8.4 million, or 1.8 percent.
• Sales tax collections total $393 million, a decrease of $15.1 million, or 3.7 percent.
• Use tax receipts, collected on out-of-state purchases including online sales, generated $64.8 million, an increase of $6.7 million, or 11.5 percent.
• Gross production taxes on oil and natural gas total $46.4 million, a decrease of $27.4 million, or 37.2 percent.
• Motor vehicle taxes produced $58.9 million, down by $4.3 million, or 6.8 percent.
• Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana, and alcoholic beverages, produced $133.5 million – up by $10.4 million, or 8.4 percent.
Combined gross receipts for the past 12 months (October 2019 through September 2020) compared to the prior 12 months showed:
• Gross revenue totals $13.26 billion. That is $467.5 million, or 3.4 percent, below collections from the previous 12-month period.
• Gross income taxes generated $4.77 billion, reflecting an increase of $120.8 million, or 2.6 percent.
• Individual income tax collections total $4.1 billion, down by $24.2 million, or 0.6 percent.
• Corporate collections are $664.9 million, an increase of $145 million, or 27.9 percent.
• Combined sales and use taxes generated $5.46 billion, a drop of $149.8 million, or 2.7 percent.
• Gross sales tax receipts total $4.7 billion, down by $196.5 million, or 4 percent.
• Use tax collections generated $758.7 million, an increase of $46.7 million, or 6.6 percent.
• Oil and gas gross production tax collections generated $708.8 million, down by $428.7 million, or 37.7 percent.
• Motor vehicle collections total $773.6 million. This is a decrease of $18 million, or 2.3 percent.
• Other sources generated $1.55 billion, up by $8.2 million, or 0.5 percent.
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