Tax collections slightly exceed revised forecast in August

Hannah News Service 

Newly updated revenue forecasts for FY25 were close to the mark in August, with tax collections netting about half a percent more than expected, according to preliminary data from the Office of Budget and Management (OBM). 

OBM recently decided to update revenue forecasts for the second half of the biennium, in part to account for a large variance in personal income tax collections tied to new federal guidance and state law on state and local tax (SALT) tax deductions for pass-through filers. (See the Hannah Report, 8/8/24, 2/7/24, 7/9/24.) 

August tax revenues reached $2.56 billion, up $16.5 million or 0.6% overestimates. Year-to-date tax revenues stand at $4.65 billion, 0.4% overestimated. 

Sales taxes were barely underestimated, with non-auto sales tax collections of $952 million lagging estimates by $5 million or 0.5%, while auto sales taxes of $193 million were up $3.4 million or 1.8%, for a total variance of -$1.6 million or 0.1%. 

Income taxes were 1.2% or $9.6 million ahead of estimates, reaching $826 million. 

The Commercial Activity Tax (CAT) brought in $427 million, up $8.8 million or 2.1%. 

August tax collections lag figures for the same month in 2023 by nearly $90 million or 3.4%. For FY25 so far, collections are down $80 million or 1.7% compared to the first two months of FY24.