A review of the Mississippi Department of Revenue’s most recent reports of tax payments indicates that April and May were among the two most lucrative months in state history.
Mississippi received $860 million from 36 different state taxes in May. That compares to $602 million in tax receipts in May 2020, when the state, nation and world were shut down because of the covid-19 pandemic.
Tax receipts reported in April of those two years show an even larger difference. In April 2021 the state took in a whopping $1.210 billion in taxes, compared to $763 million the year before.
The two-month totals: $2.070 billion in April and May of this year vs. $1.366 billion a year ago. That is a $704 million gain in 2021.
Comparisons from the two prior years, 2018 and 2019, amplify how stunning this year’s take was. In April and May 2019, tax revenues were $1.742 billion. For the same two months of 2018, revenue was $1.606 billion.
The 2018-19 figures are much higher than 2020’s — but much lower than 2021’s. This shows how the pandemic and the shutdown hit Mississippi residents and businesses in 2020. They also make the 2021 rebound that much more impressive.
Also making 2021 noteworthy is a fiscal year comparison. For 11 months, from June 2020 through last month, Mississippi’s tax receipts were $8.5 billion. A year ago, the 11-month total was $7.2 billion.
As for what’s bringing in the big bucks, much of the increase is coming from the largest tax producers: the sales tax, income tax and corporate taxes.
Sales taxes are up $300 million for the current fiscal year, which is the best signal that the economy is regaining its balance because it means people are buying things.
Income taxes and paycheck withholdings are up about $400 million for the same period. Fiscal-year corporate tax payments are up by $265 million. The use tax, paid on certain materials purchased by companies, is up $209 million.
It would be naive to assume that the state has bounced back from the pandemic so resoundingly all by itself. It got plenty of help from the tidal wave of federal money that came pouring out of Washington last year and this year.
Not only did individuals receive significant help from the federal government in the form of multiple stimulus payments, but a lot of businesses also received assistance with the intention of enabling them to avoid layoffs. The unemployed also received extra federal money each month. It’s certain that a lot of that money finally has made its way into the broader economy.
For a year, at least, there ought to be a little less revenue pressure in Jackson at budget time — although this year’s figures are sure to put renewed emphasis on the idea of eliminating the income tax. The big question, however, is how much all the pandemic aid has skewed state tax revenue upward. This time next year, we’ll know.
