The Department of the Treasury is reporting that February revenue collections for major state taxes totaled $3.180 billion, higher by $378.5 million, or 13.5% above last year.
The growth in total revenues was largely due to lower refunds given to taxpayers under the Gross Income Tax (GIT) and the Corporation Business Tax (CBT).
Fiscal year-to-date, total major revenues of $27.112 billion are up $1.050 billion, or 4.0% above last year, and approaching the year-end target growth of 5%, according to the Treasury report.
February collections for the GIT, which is dedicated to the Property Tax Relief Fund, totaled $1.454 billion, up $169.8 million, or 13.2% above last year. The revenue growth was driven by higher employer withholding collections and lower refunds.
The decrease in refunds was mainly due to the initial batch of Tax Year 2024 refunds being issued in early March 2025, whereas last year the first batch of Tax Year 2023 refunds were sent out in the final days of February 2024. Net collections also included significant non-recurring refund activity related to prior years. Fiscal year-to-date, GIT revenues of $11.650 billion are now $889.8 million, or 8.3%, ahead of last year.
The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $953.8 million, up $52.8 million, or 5.9% over, last February. However, the Treasury Department said this growth was slightly overstated as a quarterly cannabis tax revenue transfer, which was processed last year in February 2024, did not occur until March 2025.
SUT growth would have been 3.9% over last year if the $17.7 million cannabis shift had occurred in February 2025. Fiscal year-to-date, SUT collections of $7.963 billion are up $275.4 million, or 3.6%.
The CBT, the second largest General Fund revenue source, totaled $21.0 million in February, higher by $132.9 million, or 118.7%, above last year. February revenues are up sharply over last year due to a large decline in refunds.
Fiscal year-to-date, collections of $2.250 billion are down $128.6 million, or 5.4%. The Treasury Department expects CBT revenues to perform better during the second half of Fiscal Year 2025, as Corporate Transit Fee collections are expected to be received.
February is an important month for the Insurance Premiums Tax (IPT), as payments trickle in ahead of the March 1 filing date. February collections of $256.1 million were $38.0 million, or 12.9%, lower than last February.
Preliminary data for February indicates that IPT revenues may have been suppressed by refund issuances related to prior years’ tax credits. Fiscal year-to-date, collections of $161.8 million are down $133.0 million, or 45.1% below the same period last year.
Petroleum Products Gross Receipts Tax (PPGRT) collections of $130.2 million were up $18.3 million, or 16.4% over last year. Fiscal year-to-date, collections of $881.9 million are up $28.4 million, or 3.3% above last year. Effective Jan. 1, 2025, the PPGRT rate was increased by 2.6 cents. Due to a one-month reporting lag, tax payments made in February were the first reflective of the increase.
Realty Transfer Fee revenues of $49.0 million were up $14.3 million, or 41.1% above last February, and have now reported positive growth for nine of the past 10 months. The growth in realty revenues has been supported by a continuing turn-around in property sales, as median home prices have remained elevated. Fiscal year-to-date, revenues of $309.8 million are $44.9 million, or 16.9% above last year.
On Wednesday, the Legislature will begin public hearings on Gov. Phil Murphy’s proposed $58.1 billion state budget for the Fiscal 2026 Year that begins on July 1. The proposed FY26 spending plan is $1.4 billion higher than the current year budget (+2.7%) and counts on the state collecting more than $1 billion in new revenue through a series of proposed and expanded tax and fee hikes that the governor has asked the Legislature to approve.
