Gross production revenue boosted 2018 levels in Oklahoma but fell in December

Oklahoma Treasurer Randy McDaniel revealed Wednesday that gross receipts to the Treasury grew at a double-digit pace for 2018 and increased by more than $1.5 billion compared to the previous year.

At the same time, oil and gas gross production revenue for the year totaled $988.4 million, an increase of $451.2 or 84% compared to 2017. They also dropped from November to December, reflecting a decline in oil and gas prices worldwide.

For December 2018, gross production taxes totaled $118.4 million, an increase of $62.2 or 110.7% from December 2017. However, the December collections were down $407,753 compared to November 2018. That’s a drop of 0.3%.

Overall, the state’s gross receipts for 2018 were slightly less than $13 billion and grew by 13.2 percent compared to calendar year 2017 collections. During the month of December, total receipts topped $1.1 billion and were up by more than $135 million, or 13.4 percent, compared to December 2017.

“Oklahoma’s economy has been performing admirably,” Treasurer McDaniel said. “Gross receipts have improved significantly, while unemployment remains low. These and other economic indicators point to a favorable outlook for the state, but could be restrained by the downturn in energy prices, global trade uncertainty, and stock market volatility.”

Every major revenue stream expanded during 2018 at rates ranging from 84 percent for gross production taxes on oil and natural gas production to 2.5 percent for motor vehicle taxes.

For the month of December, every major revenue source except individual income tax receipts showed growth. The tax commission reports a 1 percent reduction in individual income tax collections was likely due to one less remittance deadline for withholding taxes this December compared to last.

Officials continue to closely watch gross production tax collections due to the recent downturn in crude oil prices. December gross production collections of $118.4 million are up by $62.2 million, or 110.7 percent, compared to December 2017.

However, December collections reflect oilfield activity from October when West Texas Intermediate crude oil at Cushing averaged $70.75 per barrel. Collections in January will reflect November production, when oil prices averaged $56.96 per barrel.

Revenue generated by increased tax rates approved in House Bill 1010 during special session last year added $62.6 million to monthly collections, 5.5 percent of December gross receipts.

The largest share, $38.5 million, came from the increase from 2 percent to 5 percent in the incentive tax rate on oil and natural gas gross production. Higher tax rates on gasoline and diesel fuel generated $9.5 million, and the $1 per pack hike in cigarette taxes added $14.6 million to December’s total.

December gross collections total $1.1 billion, up $135.2 million, or 13.4 percent, from December 2017.

Gross income tax collections, a combination of individual and corporate income taxes, generated $350.4 million, a decrease of $855,385, or 0.2 percent, from the previous December.

Individual income tax collections for the month are $293.6 million, down by $2.9 million, or 1 percent, from the prior year. Corporate collections are $56.8 million, an increase of $2.1 million, or 3.8 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $428.2 million in December. That is $24.7 million, or 6.1 percent, more than December 2017.

Motor vehicle taxes produced $61.4 million, up by $1.5 million, or 2.4 percent, from the same month of 2017.

Other collections, consisting of about 60 different sources including use taxes, along with taxes on fuel, tobacco, and alcoholic beverages, produced $186.7 million during the month. That is $47.7 million, or 34.4 percent, more than last December.

Gross revenue totals $13 billion from 2018. That is $1.5 billion, or 13.2 percent, more than collections from 2017.

Gross income taxes generated $4.4 billion for the period, reflecting an increase of $372.5 million, or 9.2 percent, from the prior calendar year.

Individual income tax collections total $3.9 billion, up by $278 million, or 7.7 percent, from the prior year. Corporate collections are $499.7 million for the period, an increase of $94.4 million, or 23.3 percent, over the previous period.

Sales taxes for the 12 months generated $4.8 billion, an increase of $404.2 million, or 9.1 percent, from the prior year.

Motor vehicle collections total $784.3 million for the period. This is an increase of $19.4 million, or 2.5 percent, from the trailing year.

Other sources generated $2 billion, up by $269.2 million, or 16 percent, from the previous 12 months.

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