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DRT: EITC/CTC receipts posted, but refunds backlog and use‑tax reconciliation remain concerns
Summary
DRT reported receipt dates and dollar amounts for EITC and CTC advances and summarized tax‑refund processing status for tax year 2024; the department and BBMR told senators that outstanding refund processing, use‑tax reconciliation with Customs, and limited staffing are constraining collections and timely payments.
At the July 3 session, the Department of Revenue and Taxation (DRT) reported recent federal tax‑credit advancements and a snapshot of outstanding refunds. Marie Lizama of DRT said earned income tax credit (EITC) funds of $46,022,000 were received on March 3 and child tax credit (CTC) funds of $51,457,000 were received on Feb. 24; the department noted the additional child tax credit is included in the CTC figure. Lizama told the committee the American Opportunity Tax Credit is currently being calculated and will be requested next month.
On tax refunds and returns, DRT presented tax‑year 2024 figures: of 60,152 individual returns filed, 51,866 were refund returns and 38,656 refunds were processed and paid as of the May report. DRT reported an unprocessed (error‑free) refund volume of about 2,005 returns totaling roughly $5.3 million through May 18. DRT and BBMR flagged that some returns remain in examination or audit and that backlog and reconciliation work remain.
Committee members pressed on use‑tax shortfalls and reconciliation with Customs and Quarantine. DRT representatives said reconciliation is hampered by incomplete or inconsistent shipment documentation, limited staffing (two full‑time employees in the branch working with supplemental staff from other divisions), and the lack of an automated, shared system between Customs and DRT. DRT described a short‑term shared Google document used to improve real‑time coordination, and both DRT and BBMR said an automated solution or scanners at port/airport would materially help reconciliation. BBMR noted the executive budget request assumes a lower use‑tax projection for FY26 than FY25 tracking, and that additional attention to application and collection of use taxes is needed.
DRT committed to follow up with additional detail on outstanding receivables and examination work that affects refund timing and amounts. Senators requested specific outstanding accounts‑receivable figures and remission timing for large items.
