Major state revenue collections were down slightly for February, primarily due to taxpayers getting a jump on filing for their 2025 Tax Year refunds, the Department of Treasury says.
February revenue collections for the major taxes totaled $3.091 billion, down $89.4 million, or 2.8% lower than last year. February is typically a minor month for revenue collections, with no key payment due dates. The month saw declines in the Gross Income Tax (GIT), mainly due to the early start on Tax Year 2025 refunds, and in the Corporation Business Tax (CBT).
Treasury said it expects Fiscal Year 2026 collections to continue showing moderate growth in the months ahead, as reflected in the updated Fiscal Year 2026 revenue forecasts included in the Governor’s Budget Message for Fiscal Year 2027.
Fiscal year-to-date (July 2025- February 2026) total major revenues of $27.991 billion are up $879.5 million, or 3.2%, compared with the same period prior year.
February collections for the income tax, which are dedicated to the Property Tax Relief Fund, totaled $1.253 billion, down $201.0 million, or 13.8% lower than last year. The decrease was entirely due to Treasury’s early issuance of the first large tranche of Tax Year 2025 refunds in late February, as opposed to the usual time frame of early March.
The elevated level of refunds for the month more than offset the strong growth in employer withholding. Fiscal year-to-date collections of $12.469 billion are now up $818.9 million, or 7.0% above the same period last year.
The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $974.9 million, an increase of $21.1 million, or 2.2% over last year. Fiscal year-to-date collections of $8.197 billion are running $234.8 million higher, or 2.9% above the same period last year.
The CBT, the second largest revenue source, totaled negative $22.6 million in February, a decrease of $43.6 million, or 207.8% below last year. February is generally a low collection CBT month, with refunds commonly surpassing payments. Fiscal year-to-date collections of $1.389 billion are down $861.4 million, or 38.3% lower than the same time last year.
The weakness in CBT revenues this fiscal year continues to be driven by significantly elevated levels of refunds, many of which have been claimed for tax periods prior to 2024, and substantial declines in both final and estimated payments, Treasury officials said.
Christopher Emigholz, NJBIA’s Chief Government Affairs Officer, said that the lower CBT revenues and higher CBT refunds factored into Gov. Mikie Sherrill proposing to limit the use of the Net Operationg Loss (NOL) tax deduction for the next three years.
"NJBIA is concerned about the message this sends to corporate taxpayers who have taken the gamble to invest in New Jersey and now have had the rug pulled out from under them,” Emigholz said.
February was an important month for the Insurance Premiums Tax (IPT), with the first prepayment of half the estimated calendar year liability due on March 1. February collections of $306.0 million were $49.9 million, or 19.5% higher than last year, although last February’s IPT revenues were offset in part by refund issuances related to prior years' tax credits.
Fiscal year-to-date IPT collections of $255.9 million are up $94.1 million, or 58.1% above the same period last year.
Petroleum Products Gross Receipts Tax (PPGRT) collections in February of $137.3 million were higher by $7.1 million, or 5.4% above last February. Fiscal year-to-date revenues of $932.3 million are up $50.4 million, or 5.7% above the same point last year. The recently announced increase in the PPGRT rate of 4.2 cents per gallon took effect on Jan. 1, 2026, and began impacting revenues in the February report, due to the one-month lag in reporting.
Go here to see the monthly and yearly revenue collection comparison released on Friday by the Department of Treasury.
