The latest report from the Oklahoma Treasurer’s office showed gross production taxes on oil and natural gas increased in May, but it’s clear inflation is hitting the state.
Gross production taxes totaled $162.1 million, an increase of $74.9 million or 85.8%.
Treasurer Randy McDaniel, in releasing the overall gross receipts for May on Monday said they reflect the dampening effect of inflation on the Oklahoma economy.
May gross receipts of $1.3 billion are up 5 percent from a year ago, the slowest rate of growth in 10 months. The current annual inflation rate is 8.3 percent. Energy prices are up 30.3 percent over the year and food costs are up 9.4 percent, the largest increase since April 1981.
“Oklahoma is holding its own in a challenging economic environment,” Treasurer McDaniel said. “While unemployment remains low, equity returns have not recovered and inflation is taking a toll on everyone.”
Consumption taxes – sales and use tax receipts – grew by 5.9 percent in May, less than the current rate of inflation.
“When inflation outpaces revenue, buying power decreases,” said McDaniel. “Spending more to purchase the same things impacts all budgets, especially those of hard-working Oklahomans.”
Income tax collections dropped by almost 12 percent but this outcome is related to last year’s delayed filing deadline which increased 2021 collections. Motor vehicle receipts are up by 5.5 percent from the prior year and gross production collections in May are up significantly.
Twelve-month collections of $16.48 billion are up by $2. 6 billion, or 18.8 percent, compared to the previous 12 months with all four major revenue streams showing growth.
The Oklahoma unemployment rate in April was reported as 2.7 percent by the U.S. Bureau of Labor Statistics. That is unchanged from March. The U.S. jobless rate was listed as 3.6 percent in April, also unchanged from March.
The monthly Oklahoma Business Conditions Index improved in May. The index for the month was set at 66.1, up from 65.8 in April. The outlook remains positive as numbers above 50 indicate expected expansion during the next three to six months.
May 2022 collections compared to gross receipts from May 2021 show:
- Total monthly gross collections are $1.3 billion, up $62.2 million, or 5 percent.
- Gross income tax collections, a combination of individual and corporate income taxes, generated $357 million, down by $47.1 million, or 11.7 percent.
- Individual income tax collections are $314.2 million, a decrease of $41.6 million, or 11.7 percent.
- Corporate collections are $42.8 million, down by $5.5 million, or 11.4 percent.
- Combined sales and use tax collections, including remittances on behalf of cities and counties, total $565.7 million – up by $31.5 million, or 5.9 percent.
- Sales tax collections total $485.5 million, an increase of $26.9 million, or 5.9 percent.
- Use tax receipts, collected on out-of-state purchases including internet sales, generated $80.2 million, an increase of $4.5 million, or 6 percent.
- Gross production taxes on oil and natural gas total $162.1 million, an increase of $74.9 million, or 85.8 percent.
- Motor vehicle taxes produced $75.2 million, up by $3.9 million, or 5.5 percent.
- Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana, and alcoholic beverages, produced $140.1 million – down by $883,539, or 0.6 percent.
- The medical marijuana tax produced $4.9 million, down by $1.1 million, or 18.3 percent from May 2021.
Combined gross receipts for the past 12 months compared to the previous period show:
- Gross revenue totals $16.48 billion. That is $2.61 billion, or 18.8 percent, above collections from the previous period.
- Gross income taxes generated $5.94 billion, an increase of $920.6 million, or 18.3 percent.
- Individual income tax collections total $4.91 billion, up by $663.3 million, or 15.6 percent.
- Corporate collections are $1.03 billion, an increase of $257.3 million, or 33.2 percent.
- Combined sales and use taxes generated $6.54 billion, an increase of $774.2 million, or 13.4 percent.
- Gross sales tax receipts total $5.56 billion, up by $651.7 million, or 13.3 percent.
- Use tax collections generated $976.6 million, an increase of $122.6 million, or 14.4 percent.
- Oil and gas gross production tax collections generated $1.44 billion, up by $744.2 million, or 107.2 percent.
- Motor vehicle collections total $882 million, an increase of $70 million, or 8.6 percent.
- Other sources generated $1.68 billion, up by $98.2 million, or 6.2 percent.
- Medical marijuana taxes generated $61.5 million, down by $4.1 million, or 6.3 percent.
Source: press release