September 2020 State Tax Collections

September revenue collections from the state’s three largest taxes—the personal income tax, corporation tax, and sales tax—were ahead of budget projections by $4 billion (42 percent). Relative strength in income tax withholding and sales tax is consistent with trends in recent months. September’s strong collections from estimated payments for the personal income tax and the corporation tax, on the other hand, were a departure from July, when collections were relatively weak. The rebound in personal income tax estimated payments likely reflects, in part, the fact that stock prices have now eclipsed pre-pandemic levels. The rebound in corporation tax estimated payments likely suggests that corporations have revised upwards their expectations for profitability this year.