WV’s August tax revenue stays in the black despite plunging severance taxes

August tax collection totaled $331.4 million, 12% better than estimates of $295.55 million. But the state’s take lagged August 2019 by $4.75 million, data from the Senate Finance Committee and state Budget Office show.

The two major pillars of state tax collection, consumer sales and personal income taxes, both outperformed expectations.

Income tax collection of $134.59 million topped estimates by $4.54 million but was down $7.2 million from August 2019.

A sales tax collection of $129.6 million topped estimates by $4.6 million and August 2019 collection by $5.64 million. Because sales taxes are remitted to the state a month after they are collected, the revenue reflects July sales, before the $600 weekly unemployment supplement through the federal CARES Act expired.

Severance tax collection — predominately from coal and natural gas production — continued to sag in August, with collection of $3.86 million missing estimates by $1.74 million, or 31%. Severance taxes were down 86% from August 2019, when the state took in $28.84 million.

Liquor and beer tax collection totaling $3.06 million surpassed estimates by 25% and August 2019 figures by 24%.

The tobacco tax collection of $9.51 million trailed estimates by 41%, or $6.59 million, and August 2019 by $4 million.

While August is not a major month for state tax collection, the positive numbers put the state about $80.34 million, or about 11%, above revenue estimates so far in the 2020-21 budget year.

Justice plans a virtual news conference Thursday afternoon to discuss revenue and the state economy, which he describes as critical in weathering the coronavirus pandemic.

“If the economics blow up,” he said, “there’s a whole lot of things we can’t do.”