The trend of above-benchmark monthly tax collections continued in March as the Department of Revenue brought in $3.858 billion — $802 million or 26.2 percent more than actual collections in March 2021 and $427 million or 12.5 percent above the expectation for the month.
Revenue Commissioner Geoffrey Snyder said Tuesday that March’s revenues, like collections for January and February, were affected by a change in state law affecting taxes for pass-through entities, or businesses that pass all income on to owners and investors. After adjusting for the pass-through payments, DOR said, March 2022 collections surpassed March 2021 by $423 million and rose above the monthly benchmark by $455 million or 15.1 percent.
“March collections increased in most major tax types in comparison to March 2021 collections and the March 2022 monthly benchmark, including increases in withholding, non-withholding, sales and use tax, and corporate and business tax. ‘All other’ tax, which includes several tax categories, decreased relative to March 2021 collections but increased relative to the March 2022 benchmark,” he said. “The increase in withholding in comparison to March 2021 collections is likely related to labor market conditions while the increase in non-withholding tax collections is mostly due to an increase in income return payments. The sales and use tax increase reflects continued strength in retail sales, which in turn was impacted by rising inflation. The decrease in the ‘all other’ tax category is attributable to estate tax, a category that tends to fluctuate.”
Through three-quarters of fiscal year 2022, tax collections have totaled approximately $27.545 billion, which is $4.961 billion or 22 percent greater than collections in the same period of fiscal year 2021 and $2.184 billion or 8.6 percent more than DOR’s year-to-date benchmark. After adjusting for the pass-through entity excise, DOR said year-to-date collections are trending ahead of expectations by $1.515 billion or 6.2 percent.
March tends to be “a mid-size month for revenue collections, ranking #6 of the twelve months in nine of the last ten years,” DOR said. April tends to be the most significant month for state tax collections and DOR has set this month’s benchmark at $4.884 billion. April revenues are scheduled to be announced by May 4.