Treasury: State Revenues Weaken Further in June as Crucial July Collections Loom

(TRENTON) – The Department of the Treasury reported that June revenue collections for the major taxes totaled $2.92 billion, down $503 million, or 14.7 percent below last June. The June decline eclipsed last month’s decline of 13.5 percent over the previous May, indicating that the economic impact of the global pandemic shows little signs of abating.  Fiscal year-to-date, total collections of $29.784 billion are now down $3.0 billion, or 9.2 percent below the same period last year.

The Gross Income Tax (GIT), which is constitutionally dedicated to the Property Tax Relief Fund and is the State’s largest tax revenue source, posted June collections of $1.281 billion, 12.6 percent below last June.  Year-to-date, GIT collections of $13.085 billion are $2.14 billion below the same 12-month period in FY 2019, down 14.1 percent.  Treasury expects a portion of the year-to-date shortfall to be made up during July, when deferred April tax payments are due, although just how much remains to be seen as it is likely more taxpayers than usual will request extensions.

The Sales and Use Tax, the largest General Fund revenue source, reported collections of $714.9 million in June, 14.6 percent below last June, marking the third largest monthly decline in modern history. The largest monthly decline in modern history occurred just last month.  Year-to-date, Sales Tax collections of $8.789 billion are now $147 million below the same period last year, down 1.6 percent.  Because the Sales Tax reports with a one-month lag, June collections reflect consumer behavior during May, the third month of COVID-based business restrictions.

The Corporation Business Tax (CBT), the second largest General Fund revenue, generated $620.5 million, down 23.0 percent from last June.  Year-to-date, CBT collections of $3.441 billion are $613 million below the same 12-month period last year, down 15.1 percent.  June was the seventh consecutive month to witness declining CBT revenues.

Treasury is closely monitoring collections due July 15 under the extended tax filing seasons for both the GIT and CBT and will present an updated set of Fiscal Year 2021 revenue forecasts by August 25, as required by law.

Attached is the monthly cash collections chart for the major taxes.