Treasury:  FY 2019 Revenue Collections Above Target In September

TRENTON – The Department of the Treasury reported today that September revenue collections were above target growth at the close of the first quarter of FY 2019.  Collections for the major taxes totaled $3.295 billion, up $393.7 million, or 13.6 percent, compared to last September.  Year-to-date, total collections of $5.72 billion are up $591.2 million, or 11.5 percent above the same three months last year.

The Corporation Business Tax (CBT), the second largest General Fund revenue, was the strongest performing revenue this month, bringing in $652.5 million, which is 83.4 percent above last September.  Year-to-date through the first quarter, the CBT has collected $839.4 million, or 91.5 percent above last year.  While September is an important quarterly estimated payment month, revenue growth was enhanced by a large, non-recurring payment of roughly $100 million.  Adjusting September’s receipts for this non-recurring payment, baseline growth was 55.2 percent, which is consistent with the year-end target growth rate of 47.2 percent.  The CBT is expected to grow significantly in FY 2019 due to substantial state and federal tax policy changes that influence the tax base and the timing of certain payments.   Similarly, other states are also reporting strong growth in corporate tax revenues.

The Sales and Use Tax, the largest General Fund revenue source, reported $772.8 million in September, up 1.3 percent over last September.  Year-to-date, sales tax collections of $1.574 billion are up 1.7 percent from the same period last year.  The second step of the sales tax rate reduction that began on January 1, 2018 will continue to impact collections through the end of 2018.  If not for the rate reduction, underlying growth in the sales tax through September would be 5.5 percent.  The second half of the year will also benefit from base and policy changes such as new receipts flowing from the U.S. Supreme Court’s Wayfair ruling regarding the collection of tax on certain remote sales.  The FY 2019 sales tax target assumes 6.2 percent growth.

September collections for the Gross Income Tax (GIT), which is dedicated to the Property Tax Relief Fund, totaled $1.536 billion, up 6.1 percent above last September.  GIT collections of $2.585 billion year-to-date are up 6.3 percent through the end of the first quarter, slightly ahead of the FY 2019 growth target of 5.4 percent.

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