Cash: 10.8% increase in revenue collected in February before the impending slowdown in growth
(TENTON) – The Treasury Department said revenue collected in February for major taxes was $3.038 billion, up $294.9 million, or 10.8% from last February. Year-to-date, total recoveries of $25.850 billion were up $4.357 billion, or 20.3% from the same eight months last year.
Strong growth in year-to-date collections for fiscal year 2022 (fiscal year 2022) is reflected in the recently revised year-end growth targets released on March 8 with the governor’s budget message for fiscal year 2023 The total revenue forecast for fiscal year 2022 is up $4.618 billion from the level certified when the Appropriations Act was signed into law in June. Significant additional federal stimulus measures enacted last year, strong consumer demand, rising wages, and improving COVID-19-related prospects have steadily strengthened economic activity and improved tax collection.
February collections for Gross Income Tax (GIT), which is dedicated to the Property Tax Relief Fund, totaled $1.439 billion, up $157.5 million, or 12, 3% compared to last February. Year-to-date recoveries of $10.799 billion were up $1.517 billion, or 16.3%. GIT’s overall growth in the first eight months of fiscal 2022 was driven primarily by strong employee payroll deductions, which are recovering from lower levels during the pandemic. Additionally, quarterly estimated tax payments are working well and refund levels have dropped significantly over the summer and fall, returning to normal for this time of year after filing deadlines were extended. taxpayer returns in 2020.
However, the Treasury noted that GIT growth in the second half of fiscal 2022 is expected to slow significantly in the spring due to the substantial increase in claims for Alternative Business Income Tax (PTBAIT) credits due, as well as the impact of a number of new or expanded tax relief programs introduced with this year’s budget, including the Earned Income Tax Credit and the Child Care Tax Credit and dependents, and an increase in the amount of retirement income that can be excluded from tax.
Taking all of this into account, the GIT’s revised year-end forecast released this week of $17.370 billion is up $489.0 million from the Appropriations Act, while the PTBAIT’s forecast of $3.1 billion is up from $1.730 billion.
Sales and use tax, the General Fund’s largest source of revenue, brought in $845.0 million for February, an increase of $81.4 million, or 10.7%. Year-to-date recoveries of $7.181 billion were up $801.3 million, or 12.6% higher than the same period last year. Strong collections in February reflect sales activity in January, as receipts are reported a month late. Some moderation in sales tax growth is expected in the coming months as the consumer boost from last year’s federal stimulus payments fades. The revised year-end forecast of $12.140 billion is up $789.6 million from the Appropriation Act.
The Corporations Business Tax (CBT), which is the General Fund’s second largest source of revenue, recorded collections of $89.3 million in February, an increase of $0.7 million, or 0 .8%, compared to last February. Year-to-date, CBT recoveries of $2.646 billion are up $586.0 million, or 28.4% from the same period last year. Estimated Payouts and Partnership Payouts have driven CBT growth so far this fiscal year, as corporate earnings have increased and data has shown that PTBAIT credits will almost entirely impact GIT rather than the CBT. The revised year-end forecast of $5.180 billion is up $1.216 billion from the Appropriation Act.
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