Sharp drop seen in income tax receipts

Year-over-year state income tax receipts contracted sharply in October, leading an overall slide in gross receipts to the state treasury, officials said Thursday.

"We are experiencing the spillover effect of the pandemic as it chills global demand for oil and gas," said state Treasurer Randy McDaniel. "When the energy industry is down in Oklahoma, it reduces economic activity across the state, including earned income and consumer spending."

Gross receipts are all taxes paid to the state treasury, including those collected on behalf of local governments and money later returned to taxpayers as refunds and rebates.

October gross receipts totaled $ 1.1 billion in October, which was $47 million or 4.1% less than for the same month a year ago.

Personal income tax receipts were off 7.5%, or $28 million, from the same month a year ago.

Personal income and sales taxes are the two largest sources of state revenue.

The decline in personal income tax revenue comes even as the state boasts of a lower unemployment rate and a slowing in claims for unemployment benefits. The treasurer's office noted energy sector employment, typically one of the state's most lucrative, is at its lowest in more than a decade.

Sales taxes, the other major state revenue source and the primary funding stream for municipal government, was off slightly less than 1% from a year ago.

That was almost exactly offset by an increase in use taxes, which are similar to sales taxes but charged on goods bought out of state for use in Oklahoma.

A few other lesser sources reported increases, including motor vehicle and medical marijuana taxes.

Gross production taxes on oil and gas were off by a third and amounted to just $48 million.