Treasury: January Revenue Collections Strong, Ahead of Uncertain Spring

(TRENTON) — The Department of the Treasury reported that January revenue collections for the major taxes totaled $4.701 billion, up $621.6 million, or 15.2 percent above last January. Fiscal year-to-date, total collections of $22.812 billion are up $4.062 billion, or 21.7 percent above the same seven months last year.

January collections for the Gross Income Tax (GIT), which is dedicated to the Property Tax Relief Fund, totaled $2.391 billion, up $202.9 million, or 9.3 percent above last January. Fiscal year-to-date collections of $9.360 billion are up $1.360 billion, or 17.0 percent. Overall GIT growth in the first seven months of Fiscal Year 2022 (FY2022) has been spurred primarily by strong employee withholding collections, which are recovering from weaker levels during the pandemic. Additionally, quarterly estimated tax payments are performing well and refund levels were down substantially in the summer and fall, returning to normal for this time of year after taxpayer filing deadlines were delayed in 2020.

Treasury noted that GIT growth in the second half of FY 2022 is expected to slow noticeably in the spring due to the substantial increase in PTBAIT credit claims that are due, as well as a number of new or expanded tax relief programs enacted with this year’s budget, including the expanded Earned Income Tax Credit and the Child and Dependent Care Tax Credit, an increase in the amount of retirement income that can be excluded from taxation, and three new college savings income tax deductions.

The Sales and Use Tax, the largest General Fund revenue source, reported $1.348 billion, an increase of $187.2 million, or 16.1 percent. Fiscal year-to-date collections of $6.336 billion are up $719.9 million, or 12.8 percent higher than the same period last year. The strong January collections (reflecting December sales activity) largely complete the holiday consumer shopping season, which consistently exceeded pre-pandemic levels. Some moderation in Sales Tax growth is expected in future months.

The Corporation Business Tax (CBT), which is the second largest General Fund revenue source, reported collections of $244.3 million in January, an increase of $64.7 million, or 36.0 percent. Fiscal year-to-date through January, CBT collections of $2.557 billion are up $585.3 million, or 29.7 percent above the same period last year. Estimated payments and partnership payments have driven CBT growth so far this fiscal year, partially offset by increased refund payments.