"The use of pass-through entities has grown throughout the U.S. It's a national phenomenon," Muchow said.
As for the energy sector, he said a drop in production led employees to qualify for larger refunds.
It also led to a significant drop in severance tax collections, which remains the largest factor in the state's revenue hole.
The state has collected more than $49 million less than it had anticipated since the fiscal year started last July 1, according to the revenue collection report for March.
Severance tax collections actually were up $5.5 million during the month, but they still lag $34 million behind expectations for the year so far and $53 million behind what the state had collected by this time last year.
For March, collections were $14.2 million lower than expected. That falls within the 15 percent deficit the state has being experiencing in recent months, Muchow said.
He attributed the bulk of the monthly deficit to personal income tax collections. The state anticipated receiving $122.7 million in personal income tax revenue but actually collected $106.7 million.
The corporate income/business franchise tax remains the sole bright spot for the state, consistently coming in ahead of projections. The state collected $3.5 million more than expected from the tax in March, bringing total collections to $13.3 million more than anticipated for the year so far.
Collections for the tax are up $52.5 million compared to this point last year.
Last month Gov. Earl Ray Tomblin announced he was instituting a hiring freeze for the remainder of the budget year to help offset the revenue gap. Muchow said Monday any savings from the freeze wouldn't be realized until closer to the June 30 end of the budget year.