Total Major Taxes Decline by 14.3 Percent from Historically High Levels last April
(TRENTON) – The Department of the Treasury reported today that April revenue collections for the major taxes totaled $6.969 billion, down $1.161 billion, or 14.3 percent from last April. Fiscal year-to-date total collections of $37.110 billion are now lower by $423.7 million, or 1.1 percent below the same period last year.
April collections for the Gross Income Tax (GIT), which are dedicated to the Property Tax Relief Fund, totaled $3.739 billion, down $1.411 billion, or 27.4 percent lower than April of last year. The drop in revenues was primarily caused by a reduction in final payments, which fell by $1.572 billion, or 35.8 percent. Preliminary data analysis for Tax Year 2022 indicates that a significant decline in net capital gains is the main driver behind the lower final payments. Net GIT collections were supported by 3.3 percent growth in employer withholding, which continued to show resilience, and by lower refunds. Fiscal year-to-date collections of $16.028 billion are down by $1.108 billion, or 6.5 percent.
The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $1.277 billion, an increase of $80.4 million, or 6.7 percent above last April. Due to a one-month lag in the reporting and payment of Sales Tax, April revenue reflects consumer activity in March. The NY-NJ-PA Consumer Price Index rose 4.6 percent in March, which was below April’s SUT (March taxable sales) growth rate of 6.7 percent, indicating that real retail sales in New Jersey rose for the first time since November 2022 (December’s SUT). Fiscal year-to-date receipts of $9.755 billion are up $541.0 million, or 5.9 percent over the same period last year.
The Corporation Business Tax (CBT), the second largest General Fund revenue source, totaled $1.110 billion in April, a decrease of $140.7 million, or 11.2 percent from last year. While the State due date for CBT final payments is not until May, April remains the key final payment month as companies continue to make payments and file returns according to the federal schedule. The decline in net collections was mainly due to a sharp drop in partnership payments. This decline is likely due to a statutory change to the payment requirements for partnerships, such that they are no longer required to remit tax payments on behalf of any non-resident that reasonably expects to be refunded the payment, respectively, due to the claiming of a PTBAIT credit. Fiscal year-to-date collections of $4.137 billion are down $126.1 million, or 3.0 percent lower than the same period last year.
Pass-Through Business Alternative Income Tax (PTBAIT) payments totaled $481.0 million in April, higher by $260.9 million, or 118.5 percent above the same month last year. April was a key month for PTBAIT revenues, as the first quarterly estimated payment was due. Last year, the estimated payment due date was postponed to June, therefore as anticipated, this April saw significant growth. Fiscal year-to-date revenues of $3.411 billion are up $354.3 million, or 11.6 percent over last year.
Realty Transfer Fee revenues of $35.0 million were down $24.4 million, or 41.4 percent lower than last April, as collections continue to fall on a year-over-year basis. Median home prices are well below the peak levels of last summer, but housing inventories remain relatively low, preventing rapid declines in sales prices. The drop in volume of home sales remains the primary driver behind the reduced Realty Transfer collections. Fiscal year-to-date collections of $409.9 million are down $108.3 million, or 20.9 percent from last year.
Treasurer Elizabeth Maher Muoio will appear before the Legislature’s budget committees Wednesday to provide updated revenue forecasts for FY2023 and FY2024.
Please see the attached chart for monthly and yearly revenue collection comparisons.
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