Gross Receipts to the Treasury

State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov

November 5, 2020

to the Great Recession. Rig counts statewide are reported at 14 in October, compared to a peak of 213 six years ago.

Individual income tax receipts for the month are down for the first time since June, partially due to fewer unemployment checks

Income revenue drops amidst downturnOklahoma Gross Receipts to the Treasury continued their slide in October as individual income tax collections dropped by 7.5 percent, indicating the state’s economic downturn has yet to subside, State Treasurer Randy McDaniel announced on Thursday.

October receipts from all sources total $1.1 billion, down by more than $47 million, or 4.1 percent, from October of last year. Combined gross receipts for the past 12 months total $13.2 billion, off by more than $500 million compared to collections from the previous 12 months.

“We are experiencing the spillover effect of the pandemic as it chills global demand for oil and gas,” said Treasurer McDaniel. “When the energy industry is down in Oklahoma, it reduces economic activity across the state, including earned income and consumer spending.”

The gross production tax on oil and natural gas has been down significantly every month for more than a year. Oil field employment is at its lowest level, 33,700, since prior

being sent to Oklahomans. Meanwhile, sales tax collections have been down

every month except one since September of last year.

Other economic indicators

The Oklahoma Business Conditions Index in October remained above

“We are experiencing the spillover effect of the pandemic as it chills global demand for oil and gas.”

October 2020

Oklahoma State Treasurer Randy McDaniel

Monthly Gross Receipts Change from Prior Year

Source: Office of the State Treasurer

-30%

-20%

-10%

0%

10%

20%

30%

May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

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October Gross Receipts

growth neutral for a fifth month. The October index was set at 61.1, up from 58.6 in September.

Numbers above 50 indicate economic expansion is expected during the next three to six months.

The unemployment rate in Oklahoma was reported as 5.3 percent in September, down from 5.7 percent in August.

The seasonally adjusted number of Oklahomans listed as jobless was reported as 99,800, according to figures released by the U.S. Bureau of Labor Statistics.

The U.S. unemployment rate was listed at 7.9 percent in September.

October collections

Compared to gross receipts from

October 2019, collections in October 2020 showed:

• Total October 2020 gross collections are $1.1 billion, down $47.4 million, or 4.1 percent.

• Gross income tax collections, a combination of individual and corporate income taxes, generated $376.7 million, a decrease of $19 million, or 4.8 percent.

° Individual income tax collections are $345.9 million, down by $28 million, or 7.5 percent.

° Corporate collections are $30.8 million, an increase of $9 million, or 41.1 percent.

• Combined sales and use tax collections, including remittances on behalf of cities and counties, total $460.1 million – up by $815,035, or 0.2 percent.

° Sales tax collections total $396.1 million, a decrease of $2.8 million, or 0.7 percent.

° Use tax receipts, collected on out-of-state purchases including online sales, generated $64 million, an increase of $3.6 million, or 6 percent.

• Gross production taxes on oil and natural gas total $48 million, a decrease of $23.7 million, or 33 percent.

www.treasurer.ok.gov • Page 2

Gross Receipts to the Treasury November 5, 2020

Source: Office of the State Treasurer

Monthly Gross Receipts vs. Prior YearDollar change (in $ millions) from prior year by revenue source

Shaded area denotes U.S. recession

-$100

-$50

$0

$50

$100

Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

Income Tax

Sales & Use Tax

Gross Production

Motor Vehicle Other DelayedIncome Tax+$360.5 MM

DelayedIncome Tax-$414.4 MM

Variance From Prior Year Variance From Prior Year (In $ millions) October-19 October-20 $ %

Total Income Tax 395.7 376.7 (19.0) -4.8%

Individual 373.9 345.9 (28.0) -7.5% Corporate 21.8 30.8 9.0 41.1%

Sales & Use Tax (1) 459.3 460.1 0.8 0.2%

Sales Tax 399.0 396.1 (2.8) -0.7% Use Tax 60.4 64.0 3.6 6.0%

Gross Production 71.6 48.0 (23.7) -33.0%Motor Vehicle 66.9 69.4 2.5 3.7%Other Sources (2) 151.0 143.0 (8.0) -5.3%

TOTAL REVENUE 1,144.6 1,097.2 (47.4) -4.1%

(1) Includes Collections for Counties and Municipalities(1) Includes Collections for Counties and Municipalities(1) Includes Collections for Counties and Municipalities

(2) Gross Collections from OTC

Details may not sum due to rounding. Details may not sum due to rounding.

www.treasurer.ok.gov

October Gross Receipts

• Motor vehicle taxes produced $69.4 million, up by $2.5 million, or 3.7 percent.

• Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana,

and alcoholic beverages, produced $143 million – down by $8 million, or 5.3 percent.

° The medical marijuana tax produced $5.3 million, up by $2.2 million, or 73 percent from the prior October.

Twelve-month collections

Combined gross receipts for the past 12 months (November 2019 through October 2020) compared to the prior 12 months showed:

• Gross revenue totals $13.21 billion. That is $521 million, or 3.8 percent, below collections from the previous 12-month period.

• Gross income taxes generated $4.75 billion, reflecting an increase of $75.5 million, or 1.6 percent.

° Individual income tax collections total $4.1 billion, down by $74.2 million, or 1.8 percent.

° Corporate collections are $673.9 million, an increase of $149.7 million, or 28.5 percent.

• Combined sales and use taxes generated $5.46 billion, a drop of $152.2 million, or 2.7 percent.

° Gross sales tax receipts total $4.7 billion, down by $195.8 million, or 4 percent.

° Use tax collections generated $762.3 million, an increase of $43.5 million, or 6.1 percent.

• Oil and gas gross production tax collections generated $685.2 million, down by $421.9 million, or 38.1 percent.

• Motor vehicle collections total $776

November 5, 2020Gross Receipts to the Treasury

www.treasurer.ok.gov • Page 3

12-Month Gross Receipts12 months ending Mar. 2008 – 12 months ending Sep. 2020 (in $ millions)

Shaded area denotes U.S. recessions. Source: Office of the State Treasurer

$8,500

$9,500

$10,500

$11,500

$12,500

$13,500

$14,500

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Apr-14

Oct-14

Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Apr-20

Oct-20

$9,364Feb-10

$13,214Oct-20

$11,284Dec-08

$12,103Feb-15

$10,764Mar-17

$13,735Oct-19

Prior Year Current Year Variance From Prior Year Variance From Prior Year (In $ millions) Nov18-Oct19 Nov 19 - Oct 20 $ %

Total Income Tax 4,674.4 4,749.9 75.5 1.6%

Individual 4,150.1 4,076.0 (74.2) -1.8% Corporate 524.3 673.9 149.7 28.5%

Sales and Use Tax (1) 5,611.2 5,459.0 (152.2) -2.7%

Sales Tax 4,892.4 4,696.7 (195.8) -4.0% Use Tax 718.8 762.3 43.5 6.1%

Gross Production 1,107.1 685.2 (421.9) -38.1%Motor Vehicle 792.5 776.0 (16.5) -2.1%Other Sources (2) 1,550.2 1,544.3 (5.9) -0.4%

TOTAL REVENUE 13,735.4 13,214.4 (521.0) -3.8%

(1) Includes Collections for Counties and Municipalities(1) Includes Collections for Counties and Municipalities(1) Includes Collections for Counties and Municipalities

(2) Gross Collections from OTC

Details may not sum due to rounding. Details may not sum due to rounding.

www.treasurer.ok.gov

October Gross Receipts

November 5, 2020

million. This is a decrease of $16.5 million, or 2.1 percent.

• Other sources generated $1.54 billion, down by $5.9 million, or 0.4 percent.

° Medical marijuana taxes generated $52.4 million, up by $34.3 million, or 189 percent, from prior period collections of $18.1 million.

The monthly Gross Receipts to

the Treasury report, developed

by the state treasurer’s office,

provides a timely and broad

view of the state’s economy.

It is released in conjunction

with the General Revenue

Fund report from the Office of

Management and Enterprise

Services, which provides

information to state agencies

for budgetary planning

purposes.

The General Revenue Fund,

the state’s main operating

account, receives less than half

of the state’s gross receipts with

the remainder paid in rebates

and refunds, remitted to cities

and counties, and apportioned

to other state funds.

About Gross Receipts to the Treasury

More information

Tim Allen Deputy Treasurer for Communications & Program Administration tim.allen@treasurer.ok.gov (405) 205-4929 – mobile

Archived reports dating to March 2011: https://go.usa.gov/xfu5Q

Gross Receipts to the Treasury

www.treasurer.ok.gov • Page 4

Gross Production (Extraction) Tax Collections

Source: Office of the State Treasurer

$10

$30

$50

$70

$90

$110

$130

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Prior 12 monthsCurrent 12 months

(in m

illio

ns)

Revenue Sources as Percentage of Whole

September 2020 Past 12 Months

Individual IncomeCorporate IncomeSales Tax (1)Use Tax (1)Gross ProductionMotor VehicleOther (2)

Numbers may not sum due to rounding.

13%6%4%6%

36%

3%

32%12%

6%5%6%

36%

5%

31%

mailto:tim.allen%40treasurer.ok.gov?subject=https://go.usa.gov/xfu5Qwww.treasurer.ok.gov

Economic Indicators

$10

$30

$50

$70

09 10 11 12 13 14 15 16 17 18 19 20 21

Oklahoma Stock IndexJanuary 2009 – September 2020

Shaded areas denote U.S. recessions Source: Office of the State Treasurer

$25.63

Avg=$42.79

November 5, 2020Gross Receipts to the Treasury

www.treasurer.ok.gov • Page 5

0

2.5

5.0

7.5

10.0

12.5

15.0

80 85 90 95 0 5 10 15 20

U.S.Oklahoma

Source: Bureau of Labor Statistics

Unemployment RateJanuary 1980 – September 2020

Shaded areas denote U.S. recessions

OK-5.3%U.S.-7.9%

Sources: Baker Hughes & U.S. EIA

Oklahoma Natural Gas Prices & Active RigsJanuary 2011 – October 2020

Shaded area denote U.S. recessions

Price

pe

r MM

Btu

Ac

tive

Rig

s

Active RigsPrice

0

40

80

120

160

11 12 13 14 15 16 17 18 19 20 21$0

$2

$4

$6

$8

Oklahoma Oil Prices & Active RigsJanuary 2011 – October 2020

Sources: Baker Hughes & U.S. EIAShaded area denotes U.S. recession

Price

pe

r BBLAc

tive

Rig

s

Active RigsPrice

0

75

150

225

300

11 12 13 14 15 16 17 18 19 20 21$0

$30

$60

$90

$120

Business Conditions IndexJanuary 2011 – October 2020

Source: Creighton University

This graph predicts three-to-six-month economic movement by tracking leading indicators, including new orders, production, inventories, employment, delivery lead time and prices. Numbers below 50 indicate anticipated contraction.

Shaded area denotes U.S. recession

20

35

50

65

80

11 12 13 14 15 16 17 18 19 20 21

Mid-America Oklahoma

Gross Receipts vs. Oil & Gas EmploymentJanuary 2008 – October 2020

Shaded areas denote U.S. recessions Sources: BLS & State Treasurer

Oil

& G

as

Emp

loym

en

t

12-Mo

nth

Gro

ss Re

ce

ipts

20.0

35.0

50.0

65.0

80.0

08 09 10 11 12 13 14 15 16 17 18 19 20 21$8.00

$9.50

$11.00

$12.50

$14.00

12-Month Gross Receipts (in $ billions)Oil & Gas Employment (in thousands)

www.treasurer.ok.gov