1Q State Tax Revenues See 4.1% Rise

WASHINGTON — Overall, state income and sales tax collections for the first quarter increased by 4.1% compared to the same quarter last year, the Rockefeller Institute of Government said in a report Thursday.

Tax collections have been rising for nine straight quarters, following five quarters of declines as a result of the recession, according to the report, which compiled preliminary data from 47 states.

“In general, states continue to grow with revenue collections, which is good news, but the growth is not strong enough and as a result, states are still facing budget pressures and still have imbalances,” said Lucy Dadayan, senior policy analyst at the Rockefeller Institute and author of the report.

Forty-one states reported gains, while six reported declines in overall tax revenue collections during the first quarter of this year.

North Dakota and Illinois reported the largest revenue increases, at 29.7% and 24.1%, respectively. Seven had double-digit growth: Connecticut, Delaware, Illinois, Nebraska, North Dakota, Texas and Hawaii.

California reported the largest decline in overall tax collections, 3.6%, which is mostly attributable to the expiration of temporary tax increases, the report said.

Personal income taxes grew by 3.2%, a significant slowdown, from the second and third quarters of 2011 when growth was 17.1% and 10.3%, respectively, from the same quarters the previous year.

Sales taxes grew 5.0% and corporate income taxes increased 2.2% in the first quarter of this year, compared to the first three months of 2011.

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