January Income Tax Revenue Was Way Up, But That May Be All In The Timing
January was a huge month for the state’s personal income tax collections. The state’s budget office has been close on its forecasts so far this fiscal year, but last month was unusual.
Income tax collections for January were nearly 25% more than expected. Budget director Tim Keen says the federal tax reform passed in December won’t allow for future state and local tax deductions, so people may have filed quarterly estimated payments early. "We would expect we’ll give those back through refunds that are greater than we expected or return payments in April and May that are less than we expected, so we think there’s a large element of timing there," Keen said.
And Keen says he’s still worried about sales tax revenue, which was 7 percent below projections for last month. The state has a $221 million surplus for the fiscal year so far, and while Keen says he doesn’t expect it to stay that big, he says the state is still running modestly ahead of estimates.