With January’s shortfall, year to date collections are now
$204 million short of year to date targets for FY 2005.
“January’s disappointing performance presents challenges
for New Jersey in the current fiscal year, as well as in the planning
process for FY 2006,” said Treasurer McCormac.
During the key holiday period, the Sales Tax finished $1.6 million
over projections in December, but $40 million under targets for January.
The Income Tax exceeded targets in December by $60 million, but fell
$9.9 million short of estimates for January.
Treasurer McCormac noted that the Income Tax collections for the two
months reflect the influence of filers who remit the fourth, final
and typically largest estimated payment for the tax year. The Sales
Tax collections reflect a summary of retail activity for the holiday
period. While noting that the Sales Tax was nearly 9 percent under
the January target, McCormac said the shortfall might be attributed
in part to gift card and gift certificate purchases, which, according
to the National Retail Federation, accounted for more than ten percent
of all holiday sales nationally, up from eight percent last year .
“We believe that New Jersey’s Sales Tax will see a benefit
when these gift cards are redeemed, perhaps as early as this month,” said
McCormac.
Of the other major taxes, Gross Income Tax collection for the month
totaled $1.27 billion, which is $9.9 million below projections. The
Corporate Business Tax was also down with monthly collections of $97.4
million, 4.5 percent under estimates.
Revenues were down slightly overall during the first seven months
of FY2005, with total revenue collections of $14.8 billion, which is
down $204 million from projections.
