RALEIGH (AP) ó North Carolina’s dwindling cash flow has delayed individual income tax refunds by about four weeks, the state Revenue Department said on its web site Thursday.
The state Revenue Department said it is holding on to money due back to taxpayers for about four weeks as state leaders manage the books. The state’s budget must balance once the current spending year ends June 30.
The delay is on top of the normal four-week turnaround from the time an electronically filed tax return is submitted until the refund is released. A return filled out on paper and mailed this month may take as long as 12 weeks to process, the agency said.
“Everyone who is due a refund will get a refund,” Revenue Secretary Ken Lay said Thursday.
The state this year has refunded $900 million, about $500 million behind last year’s pace, Lay said.
The Revenue Department is sending refund checks weekly as the agency makes sure there is enough money available to cover those refunds each week. Tax collections are down by about $1 billion from last year as the economic slowdown has cut corporate profits, retail sales and personal income that can be taxed.
The state has collected $300 million less from individual taxpayers, $400 million less in sales and use taxes, and $300 million less from corporations, Lay said.
The tax agency and the state’s bookkeeper, the state controller, consult daily “to determine the amount available each week for release,” the Revenue Department’s web site said. The agency is releasing refunds “in the order that they were approved for release which is basically first in first out.”
The tax agency expects to catch up with the delayed refunds by mid-May, not least because the state will be required to pay interest on refunds that haven’t been returned by May 30.
The agency also is helping taxpayers track the progress of their refund on its web site by entering the taxpayer’s social security number and the amount of refund expected.