UPDATE: State issued 3,500 tax refunds totaling about $21 million
In from the state: a progress report on the delayed tax refunds (which we've posted about before). As promised, the Hawaii Department of Taxation has begun rolling them out, and this latest report provides some numbers.
The State originally planned to issue the $275-million tax refunds in July as part of an effort to balance a budget with a $1.2 billion deficit. Last week, however, the Governor announced that the state would begin to issue some of the delayed payments ahead of schedule. Today's announcement shows that $61 million of the anticipated $275 million tax rebates will be sent to tax payers by the end of the week. This leaves the state some $214 million in refunds left to give out.
Here's the Governor's press release:
STATE ISSUED 35,000 TAX REFUNDS; 70,000 ADDITIONAL REFUNDS DUE OUT THIS WEEK
HONOLULU – The State began issuing tax refunds totaling $21 million to 35,000 Hawaii state tax filers last Friday, four days after Governor Linda Lingle announced the Department of Taxation would begin issuing the refunds as a result of improving tax collections. Another 70,000 refunds totaling $43 million have been processed and will be issued to tax filers as early as this week.
The first batch of refunds included 25,000 of the earliest filers who had signed up for automatic direct deposit. These filers received their refunds on Friday. Approximately 4,000 refund checks were mailed on Friday, and an additional 6,000 checks were mailed out yesterday.
The Department of Accounting and General Services, which processes the automatic payments and paper checks, plans to electronically deposit 50,000 refunds into tax filers’ bank accounts on Wednesday. In addition, approximately 20,000 check payments will be mailed out starting this week.
“We are pleased that we are able to get refunds out to tax filers,” said Governor Lingle. “We are able to issue the refunds at this time because of higher than expected tax collections, which is an encouraging sign that our economy is beginning to recover. I want to again thank Hawaii taxpayers for their patience and understanding as we continue to work to address our budget shortfall, while setting the foundation for a stronger economic future.”
Governor Lingle announced on Monday, May 17 that the State would immediately begin issuing state income tax refunds that were processed during the months of January and February. She made the decision after tax revenue collections for the first 10 months of the current fiscal year came in higher expected.
The total estimated refunds for taxpayers who filed during this period is approximately $125 million, which represents 53 percent of the $238 million claimed to date. An estimated 209,000 of the 380,000 tax filers who are due refunds as of May 24 – 55 percent – will incrementally receive refunds from Friday of last week into mid-June.
The refunds, including individual, corporate, and fiduciary income tax returns, are being processed based on a first-in-first-out basis, with first refunds going out to the earliest tax return filers.
The State had planned to delay 2009 tax refunds within the legally allowed 90-day refund period until early July 2010 to help mitigate the State's projected $721 million revenue shortfall for fiscal year 2010 (FY10), which ends on June 30, 2010. Delaying the refunds would have provided an estimated one-time savings of $275 million. The Administration opted for the refund delay in order to avoid the need for additional massive cuts to education, health and human services and other programs, as well as avoid tax increases next year.
As of April 30, 2010, actual tax revenue collections indicate the revenue decline for the current fiscal year will be smaller than forecasted by the Council on Revenues. For the first 10 months of FY10, actual tax collections were down 1.0 percent. In contrast, the Council on Revenues had forecasted a revenue decline of 2.5 percent.
The Administration will continue to assess the State’s cash flow before determining whether additional tax refunds can be processed before July 20, which is the deadline to comply with the legally allowed 90-day refund period.
The Tax Department requests that filers check on their refund status by accessing their website at www.hawaii.gov/tax and clicking on the link entitled, “Looking for Your 2009 Individual refund Status” under “Spotlight.”
Catch more stories like these throughout the day at my Twitter.
Come talk story at our money discussion page.