August revenues exceed estimates, up 7 percent so far this year
Topeka ? Tax revenue flowing into state coffers in August came in nearly $8.2 million above official estimates, the Kansas Department of Revenue reported Friday.
All told, Kansas collected $452.1 million in tax revenue in August. That’s $33 million more than the state collected in the same month last year.
That increase is largely due to the sweeping tax changes that Kansas lawmakers passed in June by overriding Gov. Sam Brownback’s veto of a bill that reversed course on many of the tax cuts he had championed in 2012.
But the report also showed that the full impact of those tax increases is not yet being felt.
The new law reimposed individual income taxes on more than 330,000 farmers and business owners who, under Brownback’s tax plan, paid no taxes on their nonwage business income. It also reinstated a third, upper income tax bracket and increased individual tax rates across the board.
State budget officials had projected that passage of the bill would generate $591 million this fiscal year.
The monthly revenue report, however, showed that individual income tax collections in August were only about $16 million higher than in August of last year. That was actually $9.3 million less than budget officials had forecast.
So far in the first two months of the fiscal year, individual income tax collections are up only $38 million.
Officials have said that the full impact of the bill may not show up until the April tax filing deadline. That’s because the new law waives penalties and interest for farmers and business owners who underpay taxes in their quarterly estimates.
In addition, many employers have not yet adjusted their payroll withholding rates because the makers of computer software packages that manage business payrolls did not immediately update their programs.
Meanwhile, August was a relatively good month for retail sales taxes, which came in $7.2 million higher than the estimates and $7.3 million higher than the same month a year ago.