Treasury: November Revenue Growth Moderates

(TRENTON) — The Department of the Treasury reported today that November revenue collections for the major taxes totaled $2.580 billion, up $12.5 million, or 0.5 percent above last November. Fiscal year-to-date, total revenues of $13.949 billion are up $1.249 billion, or 9.8 percent over the same five months last year. Revenue collections growth to date continues to be positive. However, Treasury still 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.

November collections for the Gross Income Tax (GIT), which are dedicated to the Property Tax Relief Fund, totaled $1.194 billion, up $68.3 million, or 6.1 percent above last November. However, this month included an extra Wednesday employer withholding payment compared to a year ago, which temporarily increases revenue until the calendar variance is rectified at the end of December. Absent the extra withholding payment, GIT collections for the month would have been down by about $115.6 million, or 8.8 percent below last November.

On the other hand, GIT refunds were up significantly, mainly driven by refund payments to taxpayers claiming Pass-Through Business Alternative Income Tax (PTBAIT) credits. Refunds for PTBAIT credits amounted to $117.4 million, approximately 60 percent of the increase in overall GIT refunds for the month over last year. This surge in refunds for the second straight month, fueled by PTBAIT claims, effectively offset the impact of the extra withholding payment on November’s total collections. Fiscal year-to-date collections of $5.868 billion are up $511.2 million, or 9.5 percent.

The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $984.8 million, an increase of $31.1 million, or 3.3 percent above last November. Due to a one-month lag in the reporting and payment of Sales Tax, November revenue reflects consumer activity in October. This month’s 3.3 percent growth again lagged behind regional inflation rates; the NY-NJ-PA Consumer Price Index rose 6.0 percent in October, indicating that real retail sales in New Jersey declined for the second straight month. This is also the third consecutive month of decelerating year-over-year growth rates for the Sales and Use Tax. Fiscal year-to-date collections of $4.354 billion are up $294.1 million, or 7.2 percent.

The Corporation Business Tax (CBT), the second largest General Fund revenue source, totaled $37.4 million in November, an increase of $36.0 million above last year. However, net collections for November of last year were low due to an elevated level of CBT refunds, which distorts the comparison. November revenues are typically among the smaller CBT months each year. Fiscal year-to-date collections of $1.488 billion are up $109.7 million, or 8.0 percent.

Petroleum Products Gross Receipts Tax (PPGRT) revenues of $122.0 million for November were $5.4 million, or 4.2 percent lower than a year ago. Year-to-date collections of $495.2 million are $102.7 million, or 17.2 percent below FY 2022, due to the prior fiscal year starting off with an 8.3 cent higher PPGRT rate than in the beginning of FY 2023. November 2022 receipts are the first month to reflect the 1 cent decrease in the PPGRT rate that took effect on October 1, 2022.

Realty Transfer Fee (RTF) revenues of $51.0 million were $5.1 million, or 9.1 percent below last year. For the second straight month collections have declined year-over-year, reflecting challenging housing market conditions. Median home prices have continued to decelerate, but housing inventories remain relatively low, which serves to prevent any rapid decline in sales prices. Monthly home sales continue to decline on a year-over-year basis. Fiscal year-to-date collections of $225.2 million are down $4.8 million, or 2.1 percent lower than the same period last year.