Tax collections up slightly in February

Provided By Hannah News Service 

State tax revenues ran nearly 2% ahead of expectations in February and are just about on target for the fiscal year so far, according to preliminary revenue data from the Office of Budget and Management. 

Tax receipts reached $2.11 billion in February, $38.4 million or 1.2% over forecasts. The sales tax drove that trend, coming in $32 million or 3.5% ahead, yielding $954.2 million versus expectations of $922.2 million. The non-auto sales tax was ahead by $22.3 million or 2.8%, while the auto sales tax was up $9.6 million or 7.2%. 

Income taxes missed the mark by $14.8 million or 5 percent, bringing in $278.2 million versus expectations of $293 million. 

The Commercial Activity Tax was close to the target, yielding $524.1 million and missing expectations by just $2.4 million or 0.4%. 

For the fiscal year so far, tax receipts of $18.7 billion are $51 million or 0.3% behind expectations. Sales and commercial activity taxes are ahead by a combined $143 million, while the income tax is down $174.3 million. OBM has attributed this lag to the one-time effects of a 2022 tax law change regarding pass-through entities.  

Variations in revenue sources overall were within expected parameters, OBM Director Kim Murnieks told Hannah News in a phone interview. 

“I would say it was a fairly normal month, a return to the patterns we’ve been seeing for a long time,” she said. 

Murnieks said OBM is looking to big swings in the domestic and foreign insurance taxes, because the underperformance in foreign and overperformance in domestic are close enough in terms of dollar value to make her wonder about miscoding of revenue. Generally, big month-to-month swings in smaller tax revenue sources are often attributable to timing. Foreign insurance tax was down $35.3 million, while domestic insurance tax was up $38.1 million. 

While large layoffs in tech and other industries are being reported nationally, Murnieks said employer withholding and other trends in Ohio provide a positive outlook. 

“Here in Ohio we are still seeing really record numbers as far as total employment, total workers employed, and fairly low unemployment,” she said. 

Compared to this point in FY23, tax collections are down $47 million or 0.3 percent, reaching $18.7 billion versus $18.75 billion.