urban revenue sharing and state shared tpt by elaine smith arizona department of revenue office of...
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Urban Revenue Sharing and State Shared TPT
By Elaine SmithArizona Department of RevenueOffice of Economic Research and
AnalysisOctober 21, 2011
Revenue Sharing to Cities and Counties
Components of the Revenue Sharing Bases
Trends for Revenue Sharing
Revenue Sharing to Cities and Counties
For FY12, the official Estimate of Revenue Sharing to cities was:
TPT: $382.5 million ($76 per capita)URS: $424.4 million ($84 per capita)
Note: The population used is the 2010 Decennial Census. The URS is subject to a minimum population of 1,500.
Revenue Sharing to Cities and Counties
For FY12, the official Estimate of Revenue Sharing to counties was:
TPT: $619.8 million ($97 per capita)
Note: The population used is the 2010 Decennial Census.
Revenue Sharing to Cities and Counties
My current estimate for FY12 for TPT revenue sharing to cities is $400 million.
The URS estimate is unchanged. For counties, my current estimate
for FY12 is $645 million.
Components of Revenue Sharing
What makes up the pool of money that is shared with the counties and the cities?
Components of TPT Revenue Sharing
Using the Retail category as an example,
the current state tax rate for retail is 6.6%. Of that:
2% goes to the Distribution Base pool 3% is Non-shared 0.6% goes to Education Tax 1.0% goes to the Temporary Tax
Components of TPT Revenue Sharing
Of the Distribution Base, 25% goes to the Cities 40.51% goes to the Counties 34.49% goes to the state general
fund
Components of TPT Revenue Sharing
The percentage each category contributes to the Distribution Base differs. For the larger contributors:
Utilities, Communications and Contracting contribute 1% to the Distribution Base.
Restaurants & Bars, Amusements, Retail, Personal Property Rentals contribute 2% to the Distribution Base.
Components of TPT Revenue Sharing
Mining Severance contributes 2% of it’s 2.5% rate to the Distribution Base.
Hotel/Motel contributes 2.75% to the Distribution Base.
Components of TPT Revenue Sharing
Of course, the volume of activity in each category factored by the percentage contributing to the Distribution Base is ultimately what dictates the pool of money available for revenue sharing to cities, towns and counties
FY11 TPT Revenue Sharing Components
Non metal and Mining Severance
Utilities
Communications
Restaurants and Bars
Amusements
Rentals of Personal Property
Contracting
Retail
Hotel/Motel
Other
Components of TPT Revenue Sharing
In FY11, the Retail category component comprised 61.5% of the Distribution Base pool. In FY05 it was 61.6%; in FY10 it was 60.1%. It is safe to say that the Retail category is, and will continue to be the largest contributor to the Distribution Base Pool.
Components of TPT Revenue Sharing
In FY11, the Contracting category component comprised 6% of the Distribution Base pool. In FY05 it was 10.6% and in FY10 it was 6.5%.
It is safe to say that the Contracting category has diminished it’s role as a strong contributor to the Distribution Base pool.
Components of TPT Revenue Sharing
The other strong contributors to the Distribution Base during FY11:
Mining Severance 2.2% Utilities 6.3% Restaurant & Bars 12.5% Rental of Personal Property 4.1% Hotel/Motel 3.8%
Components of Urban Revenue Sharing
Urban Revenue Sharing (URS) is comprised of 15% of the Net* Income Tax collections from two years prior.
So, for FY12, the URS base is the net income tax collections from FY10.
The income tax collections from FY12 will be distributed in FY14.
*after refunds
Percentage1974-1993 1972-1991 15.00%
1993 1991 12.80% $183,667,152 1994 1992 12.80% $185,405,279 1995 1993 12.80% $205,607,060 1996 1994 12.80% $218,543,272 1997 1995 13.60% $257,800,548 1998 1996 15.00% $291,243,578 1999 1997 15.00% $340,310,656 2000 1998 15.80% $377,710,988 2001 1999 15.00% $396,452,640 2002 2000 15.00% $421,876,573 2003 2001 $430,559,053 2004 2002 14.8% / 15.0% $365,065,158 2005 2003 15.00% $373,072,580 2006 2004 15.00% $425,228,927 2007 2005 15.00% $551,230,661 2008 2006 15.00% $684,538,927 2009 2007 Appropriation of
$727.68m$727,677,400
2010 2008 15.00% $628,644,630 2011 2009 15.00% $474,006,520 2012 2010 15.00% $424,423,442
Distribution Year-fiscal
Collection Year-fiscal
Distribution
Components of Urban Revenue Sharing
Components of Net Income Tax Revenue
Source FY05 FY10 FY11
Withholding 73.9% 106% 94.1%
Individual* 6.2% (20.6%) (10.4%)
Net Individual 80.2% 85.4% 83.7%
Corporate 19.8% 14.6% 16.3%
*final payments minus refunds
Components of Urban Revenue Sharing
What to watch to in order to anticipate Urban Revenue Sharing?
Withholding Corporate Credits
Components of Urban Revenue Sharing
The impact of credits on Urban Revenue Sharing:
Tax Year Corp Credit
Individual
Total Reduction in URS
2006 $87 m $286 m $373 m $56 m
2007 $92 m $264 m $356 m $53 m
2008 $82 m $246 m $328 m $49 m Credit amounts for tax year 2009 have not yet been established. Tax year 2008 should be considered preliminary.
Trends for Revenue Sharing
Preliminary estimates of future revenue sharing
Trends for Revenue Sharing
Preliminary estimates of future revenue sharing for counties
Questions?
Contact Information
Contact Information Elaine Smith – Senior Economist
Arizona Department of RevenueOffice of Economic Research & Analysis
Email: [email protected]: 602-716-6924
Additional Contact InformationDepartment of Revenue website:
www.azdor.govCounty and city revenue sharing: Elaine
Smith [email protected]; Diane Sosinski [email protected] ; Karen Jacobs [email protected]
Program Cities: Audrey McGhee [email protected]
TPT Licenses: DOR License and Registration www.azdor.gov, 800-843-7196
Additional Contact Information Tax base estimates: Elaine Smith
[email protected] ; Diane Sosinski [email protected]
Levy Limits: Darlene Teller [email protected]
Expenditure Limits: Diane [email protected]
Additional Contact Information
License Compliance Services: Peggy Creamer [email protected]
Property tax services: Property Tax Division 602-716-6843