Oil and gas tax revenue for Oklahoma is up—thanks in part to tax hike

Despite the devastating floods of May in Oklahoma, the state Treasurer reports gross receipts were up showing that Oklahoma’s economy is still growing. Oil and gas revenue has grown too, thanks to a tax hike last year.

May receipts totaled $1.1 billion which is 10.6 percent higher than a year ago according to Treasurer Randy McDaniel. Gross production taxes on oil and natural gas generated $93.9 million for May which was $19.8 million more than May of 2018. The additional revenue represented an increase of 26.8 percent over the prior year.

But the increase in gross production tax revenue can also be attributed to tax hikes implemented last year by the legislature. The $31.1 million additional oil and gas money was the largest amount of the $58.4 million added overall by the tax increases.

Higher tax rates on gasoline and diesel fuel generated $12.4 million and the $1 per pack jump in cigarette taxes produced another $14.9 million for the total in May.

Compared to April of 2019, the May revenue collections were up $14.2 million or 17.7 percent. Oil and gas gross production tax collections brought in $1.1 billion during the 12 months, up by $455.6 million, or 67.6 percent, from the previous period.

McDaniel said the oil and gas gross production receipts were based on the production of crude oil and natural gas in March, when the spot price for West Texas Intermediate Crude Oil at Cushing averaged $58.15 per barrel.

The state’s total collections reflected a 26th straight month of expansion as receipts for the past 12 months totaled $13.5 billion or 12 percent higher than a year earlier.

As for how the flooding might affect the state’s economy.

“Due to the timing of the immense flooding, which began late in May, we have yet to see any impact on gross revenue collections. We would expect to begin seeing any effect in next month’s report,” said the Treasurer.

During May, three of the four major revenue streams showed increases over the same month of last year. Income, sales, and gross production taxes showed growth, while motor vehicle taxes were down. Tax commission officials said the reduction in motor vehicle receipts is likely not an indicator of a change in current economic conditions.

Total gross collections during the past 12 months reflect growth in all major revenue streams, ranging from 67.6 percent in gross production receipts to 1.8 percent in motor vehicle taxes.

For a second consecutive month, the Oklahoma Business Conditions Index was listed as below growth neutral in May. The monthly index was set at 48.9, up slightly from 48.6 in April. Numbers below 50 indicate anticipated economic contraction during the next three to six months.

Oklahoma’s seasonally adjusted unemployment rate of 3.3 percent in April was unchanged from the previous month, while the U.S. jobless rate of 3.6 percent was down by two-tenths of one percentage point from March, according to figures released by the Oklahoma Employment Security Commission.

Gross income tax collections, a combination of individual and corporate income taxes, generated $304.9 million, an increase of $23.1 million, or 8.2 percent, from the previous May.

Individual income tax collections for the month are $272 million, up by $16.1 million, or 6.3 percent, from the prior year. Corporate collections are $32.9 million, an increase of $7 million, or 27.1 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $412.8 million in May. That is $21.7 million, or 5.5 percent, more than May 2018.

Motor vehicle taxes produced $63.2 million, down by $6.5 million, or 9.4 percent, from the same month of 2018.

Other collections, consisting of about 60 different sources including use taxes, along with taxes on fuel, tobacco, and alcoholic beverages, produced $198.8 million during the month. That is $44.6 million, or 28.9 percent, more than last May.

Gross revenue totals $13.5 billion from the past 12 months. That is $1.5 billion, or 12 percent, more than collections from the previous 12 months.

Gross income taxes generated $4.6 billion for the period, reflecting an increase of $349 million, or 8.2 percent, from the prior 12 months.

Individual income tax collections total $4.1 billion, up by $283.7 million, or 7.5 percent, from the prior 12 months. Corporate collections are $525.3 million for the period, an increase of $65.4 million, or 14.2 percent, over the previous period.

Sales taxes for the 12 months generated $4.9 billion, an increase of $263.1million, or 5.7 percent, from the prior period.

Motor vehicle collections total $784.5 million for the period. This is an increase of $14 million, or 1.8 percent, from the trailing period.

Other sources generated $2.1 billion, up by $373.1 million, or 21.1 percent, from the previous year.

%d bloggers like this: