Treasury: FY2025 Revenue Collections on Track through August

(TRENTON) - The Department of the Treasury reported that August revenue collections for the major taxes totaled $2.633 billion, up $28.0 million, or 1.1 percent above last August. Revenue growth was constrained due to one less weekly Gross Income Tax (GIT) employer withholding payment compared with last August. Total collections from the major taxes would have been higher by $219.8 million, or 9.1 percent above last year after adjusting for the one less withholding payment. Fiscal year-to-date, total collections of $3.289 billion are higher by $253.4 million, or 8.3 percent above last year.

While overall collections have started FY2025 higher compared to last fiscal year, the first two months of the fiscal year are less significant than most other months. The first meaningful tax revenue collections will occur in September because of the substantial quarterly estimated payments that are due under the GIT, Corporation Business Tax (CBT), and the Pass-Through Business Alternative Income Tax.

August collections for the GIT, which are dedicated to the Property Tax Relief Fund, totaled $1.150 billion, lower by $136.6 million, or 10.6 percent below last year. The decrease was distorted due to the calendar timing shift of one week's employer withholding payment from August to July, compared to last year. GIT revenues would have been about $55.3 million, or 5.0 percent above last year after adjusting for the one fewer payment. Estimated payments and final payments were lower, while refunds were higher. Fiscal year-to-date collections of $1.478 billion are up $30.0 million, or 2.1 percent over last year.

The Sales and Use Tax (SUT), the largest General Fund revenue source, totaled $1.116 billion, an increase of $22.8 million, or 2.1 percent above last August. Due to a one-month lag in the reporting and payment of the Sales Tax, August revenue reflects consumer activity in July. SUT Collections growth has trended below the rate of regional core inflation for the second time in the past four months.

The CBT, the second largest General Fund revenue source, totaled $23.9 million for August, an increase of $149.4 million, or 119.1 percent, due almost entirely to a significant reduction in refunds from last year. Last August, one CBT taxpayer was issued refunds in excess of $100 million for multiple return years. Collections from final payments were moderately lower, with estimated payments higher. Fiscal year-to-date, CBT collections of $241.4 million are up $145.2 million, or 150.8 percent above the same period last year.

Realty Transfer Fee revenues of $45.2 million were up $3.8 million, or 9.3 percent above last year, reporting positive growth for three out of the past four months. Unit closed sales increased in July, contributing to growth in realty revenues since August collections are reflective of July's housing market activity. Statewide median sales prices remain elevated, but mortgage rates have declined as of late, and may continue to fall in tracking with expected federal interest rate cuts.

Please see the attached chart for monthly and yearly revenue collection comparisons.