A downturn in state tax collections predicted several months ago is starting to show up.
The Georgia Department of Revenue brought in $4.19 billion in tax revenues last month, down 16.5% compared to April of last year, the agency reported Tuesday.
The declining revenues were found primarily in individual income taxes, which fell 32.4% from April 2022.
The sharp year-over-year drop in individual income tax collections is due in large part to the first-year implementation of legislation the General Assembly passed last year that permits certain pass-through entities such as S-corporations and partnerships to make entity-level tax elections on behalf of their individual partners. The bill took effect in tax year 2022 for returns filed this year.
Individual income tax payments declined by 49.4% last month compared to April of last year. Tax refunds also were down, but the 37.9% drop in that category was more than offset by the falloff in payments, resulting in the net decrease.
Net sales taxes actually rose by 2.4%, with consumer spending still strong due to a still robust state economy. Corporate income tax receipts in April increased by 4.7% over April 2022.
With gasoline prices up significantly over last year, state motor fuel tax collections shot up by 83.5%.
The state’s chief economist, Jeffery Dorfman, told lawmakers in January that state tax revenues were likely to drop sharply this year because last year’s huge increase in capital gains tax payments was unlikely to be repeated.
Dave Williams writes for Capitol Beat News Service