AUGUSTA, Maine - While the overall news about state revenues in January is positive, they were under budget estimates by $14.2 million because more Mainers filed for income tax refunds than expected.
“We have seen a high volume of early tax filings that have generated a lot of refunds earlier in the process than we would typically see," state Finance Commissioner Richard Rosen told MPBN news.
He said income tax refunds are paid out of income tax payments, so even though estimated taxes and income tax withholding were above projections for the month, overall income tax revenue for the month was down.
“We expect it will all balance out over tax filing season," he said.
Rosen said one reason for early filings is the growing use of electronic filing for all types of taxes the state collects. He said it is easier and often automated by companies.
“When it comes to the income tax filing, for the collection and remittance of sales tax, for the unemployment tax, “ he said “electronic filing is now getting up into the high eighty percent, low ninety percent.”
Rosen said all the indicators of a healthy economy, such as income tax payments and sales tax revenues came in above projections and bode well for the remainder of the budget year.
“Take the sales tax, “he said, “January revenues reflect December sales and they were 7.7 percent above a year ago at the same time.”
Rosen said several economic analyses indicate lower energy costs in recent months have helped the state’s economy. He said one study indicated lower gasoline prices along added $235 a month is savings to the average Maine household.
