December revenue collections by the state for the major taxes totaled $4.747 billion, down $664 million, or 12.3%, from last December, the New Jersey Department of Treasury reported last week.
The dip was anticipated, Treasury officials said.
The Treasury, in a release late last week, said it also expects Fiscal Year 2023 collections growth to further moderate in the coming months, particularly during the spring tax filing season, when last year’s historically high collection levels are unlikely to be repeated. Fiscal year-to-date total collections of $18.696 billion are up $585.3 million, or 3.2%, over the same six months last year.
A look at some of the specifics:
- Gross Income Tax: December collections for the tax, which are dedicated to the Property Tax Relief Fund, totaled $1.571 billion, down $40.1 million, or 2.5% below last December. This December had one fewer Wednesday employer withholding payment date compared with a year ago, causing a temporary reduction in revenue for the month. Adjusting for the one less payment, GIT collections would have been up about $143.9 million, or 10.1%, compared with last December. Fiscal year-to-date GIT collections of $7.440 billion are up $471.2 million, or 6.8%.
- Sales and Use Tax: The largest General Fund revenue source, the tax totaled $985.1 million, an increase of $57.5 million, or 6.2%, from last December. Due to a one-month lag in the reporting and payment of sales tax, December revenue reflects consumer activity in November. This month’s Sales and Use Tax growth rate of 6.2% exceeded that for both October and November. The New York-New Jersey-Pennsylvania Consumer Price Index rose 5.9% in November, indicating that real retail sales in New Jersey rose slightly in November, in contrast to declining real growth the prior two months. Fiscal year-to-date sales tax collections of $5.339 billion are up $351.6 million, or 7%.
- Corporation Business Tax: The second-largest General Fund revenue source, the CBT totaled $877.1 million in December, a decrease of $57.4 million, or 6.1% from last year. The collections decline was mainly driven by a higher level of refunds compared to last year, and a slight decline in the fourth-quarter estimated payment receipts. Fiscal year-to-date collections of $2.365 billion are up $52.2 million, or 2.3%.
- Pass-Through Business Alternative Income Tax payments: The decrease in the PTBAIT, which was expected, is the primary driver behind December’s overall revenue decline. PTBAIT totaled $929.9 million, down $637.1 million, or 40.7% from the same month last year. The decline was due mainly to the timing of certain taxpayer payments. Large PTBAIT payment surges seen in December of 2020 and 2021 were dampened this year, as more taxpayers became familiar with the tax and adjusted their quarterly estimated payments throughout the tax year rather than in one lump sum in December.
Also of note:
- Realty Transfer Fee: With revenues of $39.6 million, they were down $8.7 million, or 18% below last year. For the third consecutive month, collections have declined year-over-year, continuing to reflect the challenging housing market conditions.
- Median home prices: They also have been decelerating, but housing inventories remain relatively low, preventing rapid declines in sales prices. Monthly home unit sales continue declining on a year-over-year basis. Year-to-date Realty Transfer Fee collections of $264.8 million are down $13.5 million, or 4.8%, from the same period last year.
