Corporate taxes boost New Jersey revenue in October

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New Jersey’s October revenue was up $231 million compared to a year ago and is on track to finish ahead of 2017 numbers, according to State Treasurer Ford M. Scudder.

The Garden State collected $2.185 billion for the month across the largest revenue sources aided by a 75.6% increase in corporate business taxes. Overall collections across the state’s major taxes are up 7.2% for the 2018 fiscal year that began July 1, according to the Department of Treasury report released last week. The treasury press office did not immediately respond to an inquiry on the reason for such a big jump in corporate tax revenue.

The state’s monthly gross income and sales & use taxes rose 10.4% and 4.9%, respectively, for October. Employer withholding tax collections, a component within the GIT, increased 4.8%, which Scudder said is consistent with New Jersey’s labor market expansion. Realty transfer collections rose 16.1% last month compared to October 2016, which Scudder says indicates that New Jersey’s housing market “continues to strengthen.”

New Jersey saw a surge in gross income and sales tax collections in the second half of the 2017 fiscal year. Final revenue collections for 2017 are slated to be published in the state’s soon-to-be-released Comprehensive Annual Financial Report and Scudder has forecasted consistent growth in 2018.

New Jersey has the lowest state bond rating with the exception of Illinois. The state’s general obligation debt is rated A3 by Moody’s Investors Service, A-minus by S&P Global Ratings and A by both Fitch Ratings and Kroll Bond Rating Agency.

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