4th Quarter 2009

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     The State general fund tax revenues decreased in the third quarter of 2009 compared to the same quarter of 2008.1  Tax revenues in all major categories decreased significantly.  In dollar terms, General Excise and Use Tax (GET) revenues decreased the most, followed by Net Individual Income Tax collections.
   
     For the third quarter of 2009, total tax collections distributed to the State general funds totaled $1,051.8 million, a decrease of $109.7 million or 9.4 percent over the third quarter of 2008 (Tables C-1 and C-2).  In the three quarters of 2009, State general fund tax revenues were down 14.7 percent over the same period last year; as compared to the modest 1.6 percent decreased in 2008.

     During the third quarter of 2009, GET revenues (excluding the Honolulu County Surcharge) totaled $577.8 million, a decrease of $77.2 million or 11.8 percent over the third quarter of 2008 (Tables C-1 and C-3). This was the fourth consecutive quarter with GET revenue decrease and all more than 9.0 percent. In the first three quarters of 2009, GET revenues decreased $227.5 million or 11.5 percent from the same period last year.

     Compared to the third quarter of 2008, Net Individual Income Tax revenues decreased $25.8 million or 6.7 percent to $357.2 million in the third quarter of 2009 (Table C-4).  This decrease was mainly due to a $17.0 million or 26.9 percent decrease in Declaration of Estimated Taxes (Table C-5). In addition, the Revenues from Withholding Tax on Wages decreased $11.8 million or 3.4 percent (Table C-7), and Refunds increased $10.7 million or 28.0 percent (Table C-8), which is subtracted from the categories of individual income tax revenues. In this quarter, only Payments with Returns increased $13.6 million or 87.2 percent (Table C-6). In the first three quarters of 2009, Net Individual Income Tax collections decreased $251.9 million or 21.4 percent from the same period last year; as compared to a modest decrease of 0.9 percent in 2008.  From 2004 to 2007, the Net Individual Income Tax collections increased 15.3 percent, 17.2 percent, 8.9 percent, and 0.2 percent, respectively.

     Net Corporate Income Tax revenues, which tend to be very volatile in nature, decreased $4.7 million or 37.7 percent in the third quarter of 2009 compared to the third quarter of 2008 (Table C-9).  The decreases in Net Corporate Income Tax revenues were mainly due to a $2.9 million or 12.1 percent decrease in Declaration of Estimated Taxes (Table C-10) and a $1.8 million or 15.4 percent increase in Refunds (Table C-12).

     In the third quarter of 2009, Transient Accommodations Tax (TAT) revenues decreased $7.1 million or 11.9 percent compared to the same quarter of 2008 (Table   C-13).
   
     According to the most recent data available, compared to the second quarter of 2008, changes in the major categories of the GET tax base were all negative in the second quarter of 2009.  Retailing tax base decreased 9.0 percent or $579.1 million (Table C-14), the Services tax base increased 1.4 percent or $39.0 million (Table C-15), the Contracting tax base decreased 12.7 percent or $250.9 million (Table C-16), and the Hotel Rentals tax base decreased 17.6 percent or $141.9 million (Table C-17).

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   1/ When interpreting tax figures in conjunction with other quarterly data in this report, it should be kept in mind that the tax data represent collections during the quarter.  The transactions on which the taxes were paid did not necessarily take place during the quarter.

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