Treasury: September Revenue Collections Down 4.4 Percent

TRENTON — The Department of the Treasury today reported that September revenue collections for the major taxes totaled $3.467 billion, down $161.0 million, or 4.4 percent below last September. Fiscal year-to-date, total collections of $5.607 billion are down $535.7 million, or 8.7 percent below the same three months last year.

September collections for the Gross Income Tax (GIT), which is dedicated to the Property Tax Relief Fund, totaled $1.649 billion, up $29.3 million, or 1.8 percent above last September.  However, collections were temporarily boosted because this September had five weekly employer withholding payments whereas last September only had four. After adjusting for this extra payment, the GIT declined by an estimated 8.0 percent rather than appearing to increase by 1.8 percent. Year-to-date, GIT collections of $2.385 billion are down $297.3 million, or 11.1 percent.

The Sales and Use Tax, the largest General Fund revenue source, reported $848.4 million in September, an increase of $11.0 million, or 1.3 percent. Growth softened compared to the 2.9 percent increase in August. Due to the one-month lag in Sales Tax collections, September revenue reflects consumer activity in August. As was noted last month, the various federal stimulus programs, including the Paycheck Protection Program loans, individual Economic Impact Payments (stimulus checks), and expanded unemployment insurance benefits pumped nearly $34 billion into the State’s economy through the end of July. As the federal stimulus effects fade, Sales Tax growth is also expected to weaken.

The Corporation Business Tax (CBT), which is the second largest General Fund revenue source, reported $641.6 million in September, down 11.2 percent from the same month last year. Year-to-date through September, CBT collections of $784.2 million are down $148.5 million, or 15.9 percent below the same period last year.

Lastly, the CBT for Banks and Financial Institutions, one of the smaller General Fund revenues, declined significantly from last September, due to a large one-time payment of $130.0 million that was received in FY 2020.

Treasury expects FY 2021 collections to remain weak into the winter months followed by a return to collection growth next spring and summer.

Please see the attached chart for monthly and yearly comparisons.