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Processing Error Leads To Skewed Tax Revenue Figures

Dave Dugdale

Indiana tax collections reported by the state last month were more than $80 million below projections.  

State budget officials say a processing error threw off revenue figures:

The state recently transitioned to a new tax payment processing system, intended to provide more robust data security.  But an error in the system sent about 50,000 of the more than 12,000 payments collected in September to what’s called manual processing…meaning that a state employee had to personally review the transaction. 

That backup pushed about $86 million in collections to October, significantly skewing September’s reported figures.  Individual income tax collections appeared to be $52 million below expectations; in reality, they were $23 million ahead. 

Sales and corporate taxes were also thrown off…though sales tax collections were still nearly $23 million off the mark last month.  If the processing error hadn’t occurred, revenues in September – and through the first quarter of the fiscal year – would have been right on par with expectations.  

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