May Revenues Slightly Above Target

May Revenues Slightly Above Target

TRENTON - The Department of the Treasury reported today that May revenue collections for the major taxes totaled $3.646 billion, up $951.5 million, or 35.3 percent higher than last May. Fiscal year-to-date collections of $43.864 billion are up $2.721 billion, or 6.6 percent ahead of last year.

The sharp increase in May collections was primarily due to revenues from last May being artificially lower. Certain allowable payment delays under Phase 1 of the New Jersey Tax System upgrade temporarily shifted the normal collection pattern for several taxes in 2025. This timing issue caused a skewed comparison to the positive for this May, but is expected to have the opposite effect in June. The most important taxes impacted by the one-month payment delays of last year were the Sales and Use Tax (SUT) and the Sales-Energy.

The SUT, the largest General Fund revenue source, totaled $1.112 billion, higher by $221.5 million, or 24.9 percent above last May. Again, the revenue increase is primarily due to last year's payment extensions under Phase 1 of the New Jersey Tax System upgrade. Fiscal year-to-date collections of $11.634 billion are up $548.6 million, or 4.9 percent above last year and ahead of the year-end target of 3.7 percent growth. SUT payments are expected to be down in June due to last year's timing issue. The energy component of the SUT reported $642.5 million in May, higher by $568.7 million than last May due as well to the payment extensions. Consequently, Sales-Energy is also expected to show negative growth in June.

May revenues for the Gross Income Tax (GIT), which are dedicated to the Property Tax Relief Fund, totaled $1.111 billion, up $158.8 million, or 16.7 percent above last year. The increase in revenues was primarily due to higher collections from both employer withholding and final payments, while refunds were lower. Fiscal year-to-date total GIT collections of $19.626 billion are up $1.670 billion, or 9.3 percent above last year and ahead of the year-end target of 7.7 percent projected growth.

The Corporation Business Tax (CBT), the second largest General Fund revenue source, totaled $151.0 million in May, down $61.3 million, or 28.9 percent lower than last year. May is the due date for CBT final returns and payments for calendar year filers, but most companies continue to remit at the time of the federal due date in April. Net CBT revenues for the month were down primarily due to lower revenues from both final payments and estimated payments, while refunds were higher. Fiscal year-to-date collections of $2.949 billion are down $985.8 million, or 25.1 percent below last year, and lagging the year-end target of a 19.5 percent decline. Weakness in the CBT for FY 2026 has been mainly driven by a sharp increase in refunds and by continued softness in estimated payments.

Insurance Premiums Tax (IPT) revenues for May of $263.2 million were $34.6 million, or 11.6 percent lower than last year. June 1st marks the due date for the second prepayment of half the estimated calendar year liability for IPT payers, most prepayments are usually remitted during the final week of May, however, preliminary June data suggests that the combined May - June collections total will exceed the same period from last year. Fiscal year-to-date revenues of $564.4 million are up $48.0 million, or 9.3 percent higher than last year, but below the year-end target of 21.2 percent growth.

Realty Transfer revenues of $42.7 million were down $4.4 million, or 9.3 percent lower than last May. Realty Transfer collections have been down for three out of the past four months, as the magnitude of negative growth rates from closed sales for all properties has out-weighed the positive growth in median prices for several months now, which is enough to constrain the growth in collections. Fiscal year-to-date revenues of $457.8 million are up $26.0 million, or 6.0 percent above last year, but lower than the year-end target of 6.5 percent growth.

Please see the attached chart for monthly and yearly revenue collection comparisons.