TRENTON – The Department of the Treasury today reported that July revenue collections for the major taxes totaled $5.136 billion, up $2.802 billion, or 120.1 percent over last July. This inflated and unprecedented growth was anticipated due to the change in state law that allowed individual and corporate taxpayers to defer certain payments from April to July due to the COVID-19 pandemic, following similar tax changes that were instituted at the federal level.
The Gross Income Tax (GIT), which is dedicated to the Property Tax Relief Fund, totaled $3.360 billion, up $2.412 billion, or 254.1 percent above last July. While this growth is inflated because of the extended filing deadline, collections are still below Treasury's $3.6 billion revised GIT target for July. However, lower-than-expected final and estimated payments by individuals were partially offset by improved employer withholding receipts.
The Corporation Business Tax, the second largest General Fund revenue source, totaled $589.8 million for the month of July, up a substantial $412.0 million, or 231.7 percent over last July due to the deferred payments. While corporate payments were close to expectations, refund activity fell substantially, boosting net collections.
The Sales and Use Tax, the largest General Fund revenue source, totaled $983.2 million, down $36.6 million, or 3.6 percent below last July. While down for the fifth consecutive month, July's Sales Tax decline was an improvement from the historically unprecedented declines seen from April through June. July's collections are typically accrued back to the prior fiscal period, since they represent economic activity in June. Total collections through July of $9.772 billion are 1.8 percent below the same 13-month period last year.
Some of the revenue collected in July will be attributed to the first month of the extended fiscal year that runs through September 30, while a portion of these revenues will be accrued back to the traditional Fiscal Year (FY) 2020 period that would have ended on June 30. This exercise will be particularly complicated this year for both the GIT and CBT due to the change in tax filing deadlines, as a majority of the delayed payments will be attributable to the financial year that ended June 30.
Updated FY 2020 and FY 2021 revenue forecasts will be presented by August 25 along with a revised FY 2021 budget proposal, as required by law.
Please see the attached chart for monthly and yearly comparisons.