Income tax collections January to April in states that impose broad-based personal income taxes were up 11.5% from the same period in 2014.
States found this to be a welcome shift after unexpected downturns in 2014 collections from 2013, according to a Nelson A. Rockefeller Institute of Government report.
The report, "Windfall 'April Surprises'", looked at tax collections in 38 of the 41 states that have broad-based personal income taxes. Data was unavailable from Hawaii, Louisiana, and New Mexico.
"The pleasant surprise was driven mostly by volatile nonwage income and should not be treated as recurring," said report co-authors Lucy Dadayan and Donald Boyd. "It is, nonetheless, good news for state budgets."
The growth mainly came from nonwage income such as capital gains and other investment income, the authors reported. Withholding tax income growth in January to April was "rather weak" at 3.1% compared to a year earlier, the institute reported.
Of the 38 states with reported data, 36 had income tax growth in the period and 25 had double-digit percentage growth. Only Illinois and Kansas saw declines.
In April 2014 many states saw unexpected substantial declines in tax collections compared to a year earlier. The declines stemmed from wealthy people responding to federal tax changes by shifting their income into 2013 and out of 2014.
