March tax revenues miss the mark

Ohio’s General Revenue Fund (GRF) tax revenues missed the estimate by $171.3 million (-9.6%) during the month of March. Income tax refunds, which have a significant impact on tax revenues during the income tax return filing season, were larger than anticipated and were the primary reason for the month’s outcome.  

With three months remaining in FY 2024, fiscal year to-date tax revenues are now $222.4 million (-1.1%) below estimate. Across all state sources, total revenues (including transfers) are nearly identical to the expected level and are a modest $10.6 million (-0.1%) below the mark for the year. 

March GRF personal income tax receipts totaled $390.7 million, which is $124.8 million (-24.2%) below the estimate. Year-to-date revenue is $299.1 million (-4.3%) below the estimate. On a year-over-year basis, March income tax collections are down $277.5 million (-41.5%). Year-to-date revenue is $734.5 million (-9.8%) lower than last year.  

It is worth noting that income tax bracket and rate reductions enacted in House Bill 33, the FY 2024-2025 operating budget bill which took effect in taxable year 2023, is impacting income tax collections and refunds during the current tax return filing season. As a result, year-over-year growth in income tax revenues has been, and will continue to be, lower in the coming months than would otherwise occur. 

For March, GRF non-auto sales and use tax collections totaled $828.8 million, which is $21.5 million (-2.5%) below the estimate. Year-to-date revenue is $66 million (0.8%) above the estimate. March revenue was $4.5 million (-0.5%) below last year, and year-to-date revenue is $248.6 million (2.9%) above last year. 

March auto sales tax revenues were $147 million, which is $30 million (-17%) below estimate. Year-to-date revenues are $49.3 million (-3.4%) below the estimate. Revenues were $20.3 million (-12.1%) less than last March and are $57.2 million (-3.9%) below last year on a year-to-date basis. 

GRF revenues from the CAT were $14 million (-51.1%) below the March estimate but are $61.3 million (3.3%) above the year-to-date estimate. March revenues were down $5.6 million (-29.5%) from last year, while year-to-date revenues were up $287.1 million (17.8%).  

March is not a significant collection month for the CAT because it immediately follows the month in which tax payments are due for the October-December gross receipts activity period. CAT revenue primarily comes from quarterly tax payments, so it is useful to examine the revenue stream on a quarterly basis. For the third quarter of FY 2024, CAT revenue was $2.4 million (-0.4%) below the estimate. This follows 13 consecutive quarters in which CAT revenue exceeded expectations. 

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