Gross revenue receipts returned to negative territory in February after recording modest growth for two months, State Treasurer Randy McDaniel reported Wednesday, pushed down by shrinking sales, gross production, and motor vehicle tax collections.

"Through the end of last month, we have seen a downward trend spurred by low oil and gas prices," McDaniel said. "In the coming months, we will be closely monitoring national and international developments relating to the coronavirus and the resulting economic impact."

February total monthly collections were $956.8 million, down by $14.7 million or 1.5 percent from February 2019. Collections from individual and corporate income, and use taxes were greater than those of the prior year, but not enough to offset the downturn in the other sources, McDaniel said. 

Sales tax collections for the month are down by 3.4 percent, while gross production taxes on oil and natural gas are off by almost 20 percent, he said. February marks the sixth consecutive month of contraction in both revenue sources. Motor vehicle tax receipts, down by 2.2 percent in February, are below the prior year for a second consecutive month, according to McDaniel.

Total monthly gross receipts were last reported as below the same month of the prior year in November, which ended a 32-month streak of growth.

Gross income tax collections, a combination of individual and corporate income taxes, generated $293.3 million, an increase of $2.8 million or 1 percent from the previous February. Individual income tax collections for the month are $280.1 million, up by $704,000 or 0.3 percent from the prior year. Corporate collections are $13.2 million, an increase of $2.1 million or 18.7 percent.

Combined sales and use tax collections, including remittances on behalf of cities and counties, total $409.2 million in February. That is $8.9 million, or 2.1 percent, less than February 2019. Sales tax collections in February total $356.3 million, a drop of $12.4 million or 3.4 percent from the same month of the prior year. Use tax receipts, collected on out-of-state purchases including online sales, generated $52.9 million, an increase of $3.5 million or 7.1 percent over the year.

Gross production taxes on oil and natural gas total $84.9 million in February, a decrease of $20.8 million or 19.7 percent from last February. Compared to January 2020 reports, gross production collections are down by $3.5 million or 3.9 percent.

Motor vehicle taxes produced $56 million, down by $1.3 million or 2.2 percent from the same month of 2019.

Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana, and alcoholic beverages, produced $113.4 million during the month. That is $13.4 million or 13.4 percent more than last February.

The movement of gross revenue collections often indicates which direction General Revenue Fund (GRF) collections will move when reported later in the month by the Office of Management and Enterprise Services. GRF collections, through January, the first seven months of fiscal year 2020, were $28.8 million or 0.7 percent below the estimate and $60.8 million or 1.6 percent above prior year collections for the same period, according to the office's Feb. 11 report.
The Board of Equalization was presented with an updated projection for total current fiscal year General Revenue Fund receipts that shows collections coming in 4.6 percent or $319.6 million less than was estimated in June. That is just within the 5.0 percent cushion built into the appropriations process that is necessary to avoid a revenue shortfall that triggers automatic across-the-board agency budget reductions.

The growth rate of 12-month gross receipts also continues to decline, McDaniel noted. Twelve-month receipts through February are $13.71 billion, up by 4.2 percent. In February 2019, the 12-month growth rate was 12.3 percent.
Gross revenue totals $13.71 billion from the past 12 months, March 2019 through February 2020. That is $551.3 million or 4.2 percent above collections from the previous 12-month period.

Gross income taxes generated $4.77 billion for the 12 months, reflecting an increase of $342.2 million or 7.7 percent from the prior 12 months. Individual income tax collections total $4.18 billion, up by $265.7 million or 6.8 percent from the prior period. Corporate collections are $567 million for the period, an increase of $76.6 million or 15 percent over the previous 12 months.

Combined sales and use taxes for the 12 months generated $5.58 billion, an increase of $101.6 million or 1.9 percent from the prior period.

Gross sales tax receipts total $4.85 billion, down by $8.2 million or 0.2 percent during the period. Use tax collections generated $731.7 million, an increase of $109.8 million or 17.7 percent over the previous 12 months.

Oil and gas gross production tax collections brought in $993.8 million during the 12 months, down by $72.8 million or 6.8 percent from the previous 12 months.
Motor vehicle collections total $791.2 million for the 12 months. This is an increase of $1.5 million or 0.2 percent from the trailing period.

Other sources generated $1.58 billion, up by $178.8 million or 12.8 percent from the previous period.