The State Treasury Department reported that August revenue collections for New Jersey’s major taxes totaled $2.446 billion, up $488.7 million or 25% from August 2020.
Since the 2022 fiscal year began on July 1, year-to-date, total collections of $2.78 billion are up $659.8 million, or 30.8% above the same two initial months last year.
NJBIA Vice President Christopher Emigholz said Thursday the report was cause for optimism and that the higher sales tax revenue collections were indicative of a rebounding economy.
“‘We are hopeful that revenues remain strong and that with the federal dollars we still have on hand, plus the investments we should make with those dollars and other federal relief programs, there will be no need at all for a state tax increase next year,” Emigholz said.
The Sales and Use Tax, the largest General Fund revenue source, reported $970.3 million, an increase of $79.5 million, or 8.9% above last August. The consumer spending rebound continues, as August sales tax collections are 12% above pre-pandemic levels in August 2019. Due to the one-month lag in sales tax collections, August revenue reflects consumer activity in July.
August collections for the Gross Income Tax (GIT) totaled $1.021 billion, up $212.8 million, or 26% above last August. Year-to-date collections are up $425 million, or 57.8%. Growth is spurred by recovering employee withholding collections compared to weaker levels during the pandemic last summer. Refund levels are also returning to normal after delayed taxpayer filing deadlines last year.
Lastly, the Corporation Business Tax (CBT), the second largest General Fund revenue source, reported $52.6 million in August, well above the $28 million decline last August, which was the result of last year’s corporate filing delay when refund payouts exceeded taxpayer payments. Year-to-date through August, CBT collections of $208.2 million are up $65.7 million, or 46% above the same period last year.
Treasury officials said that while overall collections are up soundly compared to last year, the first two months of the fiscal year are relatively small. The first meaningful month will be September because of the significant quarterly estimated payments that are due under the GIT and the CBT. Treasury officials said they expect FY 2022 collections growth to moderate into the winter months as the impact of the COVID-19 pandemic eases and the substantial federal income stimulus fades.
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