INDIANAPOLIS — Officials at the State Budget Agency say they are continuing to work with the Indiana Department of Revenue to understand why corporate income tax refunds so far this budget year are double what they were during the same five-month period last year.
According to monthly revenue data released Monday, Indiana in November paid $33.8 million in corporate income tax refunds above what it collected in corporate income tax payments.
Combined with similar imbalances in August and October, the state has taken in only $79 million from corporate income taxes since the budget year began in July. It's paid out $76.6 million in refunds to businesses.
The revenue forecast used by Hoosier lawmakers in April to craft the two-year state budget projected Indiana would have $237.3 million in corporate income tax revenue by this point in the budget year.
That's a shortfall of $158.4 million, or 67 percent.
Budget officials previously speculated the abnormal refunds were due to corporations timing their tax payments for financial advantage combined with speedier refund processing at the Department of Revenue.
They did not further elaborate on what's causing the corporate income tax deficit in the commentary accompanying November's state revenue report.
On the plus side, Indiana's two largest revenue categories — sales tax and personal income tax — are right on target for the year.
But the drag from corporate income taxes means Indiana's total revenue is running $149.5 million, or 2.5 percent, below expectations nearly halfway though its budget year, and just $8.7 million, or 0.2 percent, above the same period last year.
Republican Gov. Eric Holcomb has not publicly spoken about the revenue issue. A revised state revenue forecast is due to be released Dec. 18.
Holcomb earlier directed state agencies to hold back 3 percent of planned spending in case tax collections did not meet expectations.
Indiana also maintains a budget reserve totaling $1.8 billion to weather revenue declines without resorting to tax increases.