Corporate income taxes push Virginia's revenues ahead

WASHINGTON Fri Jan 11, 2013 5:25pm EST

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WASHINGTON Jan 11 (Reuters) - Virginia's revenues continued to grow in December, up 4.9 percent from a year ago due to strong collections in corporate income tax payments, Governor Bob McDonnell said on Friday.

Halfway through its fiscal 2013, Virginia is seeing revenues rise 3.5 percent on a year-to-date basis, close to the annual forecast of 3.6 percent growth, McDonnell added in a statement.

The state weathered the 2007-09 recession better than most and entered the recovery quickly, largely due to contractors and others in the state who work closely with the nearby U.S. capital. For almost every month in 2012, the state saw its revenues rise. It did not release revenue estimates for November.

The federal relationship has turned threatening in recent months, as Congressional fights over cutting spending spread into military appropriations and state aid. McDonnell warned that federal uncertainty is clouding the state fiscal outlook.

According to the state's finance department, corporate income taxes, which make up 5 percent of general fund revenues, were $175.1 million in December, compared to $131.7 million in December 2011. Year-to-date collections of the tax have risen 12.6 percent from the same period last year, "well ahead of the estimate of a 4.5 percent decline," it said.

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