From the Star Ledger:
Midway through the fiscal year, New Jersey’s income tax collections have fallen off track, Gov. Phil Murphy’s administration reported on Monday.
Revenues for the fiscal year that began in July are expected to grow 7.5 percent over last year but slowed to 2.1 percent through December. The slowdown is driven largely by underperforming gross income tax collections that are budgeted to increase 5.4 percent — or $824 million — compared with last year. Treasury data shows they have fallen 6.5 percent below last year’s collections.
At 6.5 percent through November, all revenues had been just slightly lagging that 7.5 percent target. The income tax was beating its goal.
Last fiscal year, New Jersey collected $15.2 billion in income taxes, and the administration projects it will bring in $16 billion this year, thanks to a new “mega-millionaires tax” on income over $5 million. The gross income tax is the state’s largest single source of tax revenue.
Another major tax, the sales tax, remains behind the governor’s projections — growing by 1.2 percent compared with 6.2 percent. The Corporation Business Tax, which underwent a big update in this year’s budget, has grown 60.8 percent versus this time last year, where it is projected to grow 47.2 percent.
“Corporate tax revenues are expected to grow significantly due to substantial state and federal tax policy changes that influence the tax base and the timing of certain payments,” according to the Treasury Department.