Treasury: Revenue Collections Higher by 2.6 Percent in November; Collections Down 2.8 Percent Overall

(TRENTON) — The Department of the Treasury reported that November revenue collections for the major taxes totaled $2.647 billion, up $67.8 million, or 2.6 percent over last year. Revenues grew primarily as a result of higher net collections from the Gross Income Tax, Corporation Business Tax, and from the Pass-Through Business Alternative Income Tax. Year-to-date, total revenue collections of $13.564 billion are down $385.1 million, or 2.8 percent from the same period last fiscal year.

November collections for the Gross Income Tax, which are dedicated to the Property Tax Relief Fund, totaled $1.209 billion, up $14.7 million, or 1.2 percent over last year. Moderate growth in employer withholding collections was largely offset by declines in estimated and final payments, and higher refunds. Fiscal year-to-date collections of $5.449 billion are down $419.0 million, or 7.1 percent from last year.

The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $973.0 million in November, down $11.7 million, or 1.2 percent from last year. Due to a one-month lag in the reporting and payment of Sales Tax, November revenue reflects consumer activity in October.  SUT collections growth has trended lower than the rate of regional consumer price (CPI) inflation for seven straight months. Fiscal year-to-date collections of $4.359 billion are up slightly by $4.8 million, or 0.1 percent.

The Corporation Business Tax, the second largest General Fund revenue source, totaled $55.9 million in November, up $18.1 million, or 47.9 percent above last November. Final payments were significantly higher by $84.2 million, but this was largely offset by an increase in refunds of $76.1 million. Fiscal year-to-date collections of $1.492 billion are up $31.4 million, or 2.1 percent.

Petroleum Products Gross Receipts Tax (PPGRT) revenues of $123.2 million were up $1.2 million, or 1.0 percent above last November. Year-to-date collections of $491.3 million are down $3.9 million, or 0.8 percent below last year. The PPGRT rate was increased by 0.9 cents, to 31.8 cents per gallon, effective on October 1, 2023. Payments received from November 2023 onward will reflect this rate increase, which should generate an additional $3.9 million per month on average.

Realty Transfer Fee revenues of $44.5 million were down $6.5 million, or 12.7 percent below last year. Reductions in unit closed sales continue to be the main driver behind lower realty collections. Reductions in inventories of homes available for sale accelerated over the first half of 2023, exerting upward pressure on home prices, but have been decelerating since June. Mortgage rates have come down over the past month, but still remain elevated.

Treasury continues to anticipate that aggregate FY2024 revenue collections for the major taxes will decline for the first half of the fiscal year, followed by some growth in the second half.