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January 16, 2013

Holiday shopping helps boost tax revenues

By Sean Murphy Associated Press

OKLAHOMA CITY — A brisk holiday shopping season helped boost Oklahoma’s sales tax receipts last month to an all-time monthly high, but overall collections to the state’s general fund dipped, mostly due to tax rebates to energy companies and lower oil and natural gas prices, state finance officials said Tuesday.

Secretary of Finance Preston Doerflinger said total collections to the general fund in December were $528.9 million, down 2.5 percent from December 2011. Overall receipts to the general fund for the first six months of the current fiscal year totaled $2.6 billion, a 1.6 percent drop from the first six months of Fiscal Year 2012.

But Doerflinger said those slight declines are not due to economic factors, but rather tax rebates offered to oil and gas companies and lower energy prices.

Total tax collections on oil and gas production last month were $8.3 million, a nearly 85 percent decrease from December 2011. For the first six months of the fiscal year, oil and natural gas tax collections have plummeted nearly $231 million, or 94 percent, from the same time a year ago, again due almost entirely to the generous rebates the state offers to energy companies.

The tax rebates that apply to most deep and horizontal wells were suspended for two years as lawmakers scrambled to fill a budget hole in 2010. Now the credits have come back on line and the state also is paying back those that were suspended for two years.

But Doerflinger said energy tax collections are expected to pick up in coming months, especially from oil, now that the $150 million threshold has been reached on state oil revenue that is earmarked specifically for education.

“Another is the likelihood of increased drilling activity in the months ahead, based on plans of energy companies,” he said. “The latest rotary rig count from Baker Hughes shows an increase of four rigs from the previous week to 185.”

The good news in Tuesday’s revenue report is that holiday shopping provided a huge boost to revenue collections, with December receipts totaling $172 million, an all-time record for any month and an increase of 12.1 percent over the same month a year ago. The previous record of $165.4 million was set in June.

“We knocked it out of the ball park on sales tax collections, a key indicator of economic health,” Doerflinger said.

Total income tax collections, which include individual and corporate income taxes, also were up in December, totaling $277 million, a 5.7 percent increase over December 2011.

Motor vehicle taxes produced nearly $12 million, a nearly 40 percent drop from December 2011, which revenue analysts suggest was an unusually high figure that resulted from pent-up demand for automobile purchases following the recession.

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