Treasury: Revenue Collections Up Again in September

(TRENTON) — The Department of the Treasury reported today that September revenue collections for the major taxes totaled $5.102 billion, up $539.4 million or 11.8 percent above last September. Year-to-date, total collections of $8.397 billion are up $1.034 billion, or 14.0 percent, over the same period last fiscal year.

September collections for the Gross Income Tax (GIT), which are dedicated to the Property Tax Relief Fund, totaled $1.872 billion, down $34.7 million or 1.8 percent below last September. This September had one less Wednesday employer withholding payment date compared to a year ago, causing a temporary reduction in revenue for the month. Adjusting for the one fewer payment, GIT collections would have been up about $117.0 million, or 6.7 percent compared to last September. Fiscal year-to-date collections of $3.375 billion are up $307.7 million, or 10.0 percent.

The Sales and Use Tax, the largest General Fund revenue source, totaled $1.019 billion, an increase of $83.2 million, or 8.9 percent above last September. Due to a one-month lag in the reporting and payment of Sales Tax, September revenue reflects consumer activity in August. September collections also reflect the partial impact of the State’s Back-To-School Sales Tax Holiday, which occurred from August 27 through September 5. Fiscal year-to-date collections of $2.104 billion are up $198.2 million, or 10.4 percent.

The Corporation Business Tax (CBT), the second largest General Fund revenue source, totaled $1.111 billion in September, an increase of $84.1 million or 8.2 percent above last September. Fiscal year-to-date collections of $1.338 billion are up $102.6 million, or 8.3 percent. CBT revenue growth has been driven primarily by quarterly estimated payments for Tax Year 2022, but also partially offset by higher refund levels.

Pass-Through Business Alternative Income Tax (PTBAIT) revenues jumped in September to $721.1 million, up $427.6 million or 145.7 percent above last year. Most of the increase was attributable to estimated payments, which rose by $357.4 million, as taxpayers continue to adopt the traditional quarterly payment schedule. Since PTBAIT is designed to be revenue-neutral over time, credits claimed for these payments should reduce State revenue collections, primarily under the GIT.

Petroleum Products Gross Receipts Tax (PPGRT) revenues of $123.3 million were $33.4 million, or 21.3 percent lower than a year ago because of the 8.3 cent decrease in the PPGRT rate, which affected collections beginning in November 2021. Of further note, the PPGRT rate decreased by an additional 1 cent effective October 1, 2022. Payments received from November 2022 onward will reflect this rate decrease.

Realty Transfer Fee (RTF) revenues of $62.4 million were $7.9 million, or 14.5 percent above last year, as monthly collections again over-performed in spite of market conditions. Downward pressure on RTF revenues is expected, as home prices in New Jersey have begun to decelerate and closed home unit sales have fallen.

Revenue collections growth to date is encouraging. However, Treasury expects FY2023 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. Despite the positive trends early in this fiscal year, Treasury continues to be concerned about numerous economic factors that are being closely monitored.