The State of Iowa collected just over $5.5 billion in taxes for the 12-month period that ended Wednesday, June 30th. Jeff Robinson, a senior analyst for the Legislative Services Agency, says overall state tax receipts for that 12-month period were 4.1 percent lower than they were the previous fiscal year.
“Which is, in normal times, a very bad year, but it’s better than the negative 8.7 percent for the whole fiscal year that was projected,” Robinson says. “So we’re going to finish the fiscal year better than projected, probably quite a bit better.”
Personal income taxes account for the largest share of tax payments to the state and the higher levels of unemployment combined with reduced hours at many worksites reduced overall personal income tax collections by nearly 3 percent. Robinson looked at the personal income tax returns individual Iowans and farmers filed this winter.
“I was surprised by the tax return season, although it wasn’t good, it was not near as bad as I thought it would be,” Robinson says.
Sales tax collections for the past 12 months were down slightly. “Sales tax being down 1.5 percent is better than projected because it was projected to be down 3.8 percent,” Robinson says. “So it’s contributing tens of millions to that overage for the year.”
In the month of June, overall state tax collections were more than 8 percent better than June of 2009. But Robinson says about half of that increase can be attributed to state income tax returns that got deposited in June rather than in May.
“They usually are done depositing by the end of May and they didn’t. It took them a couple of weeks in June to finish, so there’s $21 million of the $40 million of the growth which is not really growth for the monty,” Robinson says. “But it’s still a positive month and we take positive months when we can get them now.”
State tax collections were higher in three of the last four months compared to the same period in 2009.