Definition of Revenue, Offsetting Collections and Offsetting Receipts
Federal revenues consist of the money taken in by the Government through exercise of its sovereign taxing power. This includes individual and corporate income taxes, social insurance taxes (such as social security payroll taxes), excise taxes, estate and gift taxes, customs duties, and the like. Revenues are accounted for separately in the budget from budget authority and outlays.
Offsetting Collections and Offsetting Receipts
Revenues, however, do not represent all the money collected by the Government. They do not include income from the public that results from the government engaging in ‘‘business-like’’ activities with the public, such as the sale of products or the rendering of services or amounts collected by one Government account from an- other (intergovernmental collections and outlays). These collections are categorized as either offsetting collections or offsetting receipts. Examples of such activities include: proceeds from the sale of post- age stamps and proceeds from the sale of timber from Federal lands. The difference between an offsetting collection and an offset- ting receipt has more to do with the way the Federal budget records the transaction than the actual activity itself.
Some laws authorize amounts collected to be credited directly to the account from which they will be expended. Usually such amounts may be spent for the purpose of the account without further action by Congress. These are known as offsetting collections and represent amounts collected from either the public or other expenditure accounts. For example, the law authorizes the Postal Service to use proceeds from the sale of postage stamps to finance its operations, without the need for an annual appropriation. Thus assume that it costs the Postal Service $100 million to operate in any fiscal year and that $45 million is collected from the sale of stamps. This $45 million is represented in the budget not as $45 million of revenue or receipts but rather as a negative $45 million of budget authority. In this example, the receipts are deducted from the gross budget authority level of $100 million leading to a net budget authority level of $55 million. Generally, offsetting collections are associated with discretionary programs.
In comparison, offsetting receipts, such as the proceeds from a timber sale or national parks entrance fees, are not credited against the spending for the Forest Service or the National Park Service. Rather, these funds are deducted from total budget authority and outlays, not from the program or project from which they are derived. For example, assume that the National Park Service collects $10 million in entrance fees at Yellowstone National Park. These funds, although deposited in the Treasury as miscellaneous receipts, are shown in the budget as a reduction to the total level of spending for that year. Generally, offsetting receipts are associated with mandatory programs—that is, not subject to annual appropriations decisions.
U.S. Congress, Senate Budget Committee, The Congressional Budget Process – An Explanation (S. Prt. 105-67) December 1998, pp. 2-3.
See under Governmental Receipts under Collections.