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(TRENTON) - The Department of the Treasury reported today that revenue collections held steady in November with combined collections for the major taxes totaling $2.137 billion, up $206.4 million, or 10.7 percent above last November. Year-to-date, collections for Fiscal Year 2020 (FY 2020) totaled $10.918 billion, up $990.8 million, or 10 percent, above the same five month period last year. However, there remains ongoing uncertainty surrounding the continuation of these trends for the remaining seven months of FY 2020.
The Gross Income Tax (GIT), the state’s largest revenue stream, totaled $897.6 million for the month of November, up 5.9 percent above last November. GIT collections, which are dedicated to the Property Tax Relief Fund, totaled $4.728 billion, year-to-date, up 5.4 percent for the first five months of the fiscal year.
The Corporation Business Tax (CBT), which was boosted for a second consecutive month by strong final extension payments, reported $108.3 million in November and $1.252 billion year-to-date, 33.1 percent more than last year. Estimated tax payments have also been relatively strong, impacted in part by the implementation of combined reporting and market-based sourcing, which were both effective for the first time this tax year. Preliminary data indicate that more than 30 percent of estimated CBT payments for FY 2020 are being made by corporations now reporting as combined units.
Overall, however, CBT growth is projected to moderate and decline in the coming months because significant non-recurring payments received last year are not expected to repeat and the temporary 2.5 percent surtax rate will drop to 1.5 percent on January 1, 2020. Furthermore, as Treasury has noted in recent months, concerns have been expressed by tax analysts that some corporations are likely to have been overpaying state taxes upfront while they analyze the tax base implications flowing from the federal Tax Cut and Jobs Act. In the current low interest rate environment, the cost of overpaying taxes is minimal. Accordingly, it is anticipated that corporations may begin filing for large refunds or reducing their tax payments once they have a better idea of their true tax liability.
The Sales and Use Tax, the largest General Fund revenue source, reported $793.6 million in November, up 9.6 percent over last November. Year-to-date, sales tax collections of $3.474 billion are up 8.8 percent from the same period last year. The early months of FY 2020 continue to benefit from new revenues paid by certain remote online sellers due to the U.S. Supreme Court’s Wayfair ruling. After adjusting for the additional remote sellers revenue, underlying Sales and Use Tax collections are up 5.4 percent year-to-date. However, the most recent national retail sales data indicate slowing consumer demand, signaling caution for the holiday shopping season.
Outside of the above revenue streams, other major tax collections were more tempered, coming in on par with last November.