Treasury: Gross Income Tax Declines but Overall Major Taxes up 4.1 Percent in January

(TRENTON) – The Department of the Treasury today reported January revenue collections for the major taxes totaled $4.893 billion, up $191.5 million, or 4.1 percent over last January. Treasury expects Fiscal Year 2023 collections growth to moderate in the coming months, particularly during the spring tax filing season when last year’s historically high collection levels are unlikely to be repeated. Fiscal year-to-date total collections of $23.589 billion are up $776.8 million, or 3.4 percent over the same period last year.

January collections for the Gross Income Tax (GIT), which are dedicated to the Property Tax Relief Fund, totaled $2.387 billion, down $4.1 million, or 0.2 percent from last January. The slight decrease in revenues can be attributed to low growth in employer withholding and declines in the other GIT components, though net collections were supported by refunds being down significantly. Fiscal year-to-date collections of $9.827 billion are up $467.1 million, or 5.0 percent.

The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $1.398 billion, an increase of $49.9 million, or 3.7 percent above last January. Due to a one-month lag in the reporting and payment of Sales Tax, January revenue reflects consumer activity in December. January is the biggest month of the fiscal year for SUT collections due to annual holiday shopping. Taxable sales grew by 4.7 percent from 2021 over the two-month holiday sales period, measured as December and January collections combined.

The NY-NJ-PA Consumer Price Index rose 6.3 percent in December, which was above January’s SUT (December taxable sales) growth rate of 3.7 percent, indicating that real retail sales in New Jersey declined for the third time in the past four months. Fiscal year-to-date collections of $6.737 billion are up $401.5 million, or 6.3 percent over the same period last year.

The Corporation Business Tax (CBT), the second largest General Fund revenue source, totaled $248.3 million in January, an increase of $4.0 million, or 1.6 percent over last year. January is not a key month for CBT revenues. Fiscal year-to-date collections of $2.613 billion are up $56.2 million, or 2.2 percent over the same period last year.

Pass-Through Business Alternative Income Tax (PTBAIT) payments totaled $420.7 million in January, up $114.2 million, or 37.2 percent over last year. January was the due date month for fourth quarter PTBAIT estimated payments. While most taxpayers make this payment in December to take advantage of a federal deduction for the preceding tax year, January still sees significant collections prior to the deadline. Fiscal year-to-date revenues of $2.121 billion are up $22.6 million, or 1.1 percent over last year.

Realty Transfer Fee revenues of $41.6 million were down $14.7 million, or 26.1 percent below last year. Collections have now fallen for the fourth consecutive month year-over-year, continuing to reflect the challenging housing market. Median home prices have been decelerating, but housing inventories remain relatively low, preventing rapid declines in sales prices. Monthly closed home unit sales continue declining on a year-over-year basis. Year-to-date collections of $306.4 million are down $28.2 million or 8.4 percent lower than the same period last year.