- All Articles Revenue Tracking
Income Tax Withholding Tracker February 27, 2026
Income tax withholding in February came in $179 million (2 percent) above budget projections and 4 percent higher than last year. The past few months have seen more modest withholding growth compared to last fall. Zooming out to cover December, January, and February, the 3-month withholding total was just 3 percent higher than during the same period one year ago.
Cannabis Tax Revenue Update (2025 Q4) February 26, 2026
The administration currently estimates that retail excise tax revenue was $145 million in the fourth quarter of calendar year 2025 (October through December). With this latest data, we currently project cannabis tax revenues of $648 million in 2025-26. This is $36 million above the January Governor’s Budget forecast for 2025-26.
Updated "Big Three" Revenue Outlook February 20, 2026
Near-Term Revenue Outlook Improved but Future Challenges Remain. Our updated forecast anticipates revenues from the state’s three largest taxes (income, corporation, and sales) are likely to come in ahead of Governor’s Budget assumptions in the current year and about in line with assumptions in the budget year. This upgraded outlook is entirely attributable to higher expectations for income tax collections, which are being driven by enthusiasm around AI and the related stock market boom. As such, we continue to caution that these surging revenues likely are not sustainable. Our revenue outlook for 2027-28 and beyond remains similar to our November Fiscal Outlook, continuing to reflect the high risk of a revenue reversal. Under these revenues, our Fiscal Outlook estimated that the state would face structural deficits of around $35 billion annually starting in 2027-28.
Firearms and Ammunition Revenue Update (2025 Q4) February 18, 2026
For firearm and ammunition excise tax returns filed for the fourth quarter of 2025, the total amount of tax due is $16 million.
2025 Update: Tech Company Stock Pay Accounts for One-Quarter of Withholding Growth So Far in 2025-26 December 3, 2025
California's technology companies, including Apple, Google, Nvidia, Meta, and Broadcom are the most valuable companies in the world and employ thousands of highly-paid workers in the state. Many employees at these companies receive equity pay, such as stock options and restricted stock units, in addition to their base salary. As we first pointed out two years ago, state income tax withholding on stock pay has grown to more than $10 billion annually due to the AI boom in asset prices for these companies. With updated data through 2025Q3, we now believe growing withholding from these sources accounted for a quarter of the strong income tax withholding growth seen in the first three months of 2025-26.
Cannabis Tax Revenue Update (2025 Q3) December 2, 2025
The administration currently estimates that retail excise tax revenue was $177 million in the third quarter of calendar year 2025 (July through September). This is the highest quarterly total since the state eliminated the cultivation tax. With this latest data, we currently project cannabis tax revenues of $631 million in 2025-26, nearly $100 million below the budget assumption for 2025-26.
Firearms and Ammunition Revenue Update (2025 Q3) November 18, 2025
Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. Current tax return data suggest that the revenues from this tax will total around $58 million for 2024-25. Further, tax returns filed for the third quarter of 2025 show total tax due of $13 million—slightly below the quarterly average in the first year of the program.
Cannabis Tax Revenue Update (2025 Q2) September 15, 2025
For cannabis excise tax returns filed for the second quarter of 2025, the total amount of tax due is $147 million. With this latest data, we currently project cannabis tax revenues of $603 million in 2024-25 and $773 million in 2025-26.
Firearms and Ammunition Revenue Update (2025 Q2) August 18, 2025
Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. For firearm and ammunition excise tax returns filed for 2024-25, the total amount of tax due is $58 million—a bit lower than the budget package revenue assumption.
Cannabis Tax Revenue Update (2025 Q1) June 3, 2025
For cannabis excise tax returns filed for the first quarter of 2025, the total amount of tax due is $141 million. With this latest data, we currently project cannabis tax revenues of $594 million in 2024-25 and $732 million in 2025-26. Both of these estimates are within $5 million of the administration's May Revision forecast.
Firearms and Ammunition Revenue Update (2025 Q1) May 21, 2025
Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. For firearm and ammunition excise tax returns filed for the first three quarters of 2024-25, the total amount of tax due is $44 million. Based on this data, the administration's estimate of $65 million for 2024-25 appears reasonable.
Five Guidelines for Using Revenue Forecasts May 9, 2025
As part of building the state budget each year, the Legislature and Governor must make an assumption about how much revenue the state will collect. Because no one knows how much revenue the state will collect next year, leaders must rely on revenue forecasts. Both our office and the Department of Finance (DOF) provide periodic revenue forecasts that can be used for this purpose. These forecasts use the best available data to provide informed estimates of future revenue collections. Although they have limitations, they are important to the state budget process because they offer an objective foundation on which the budget can be built. In this post, we offer guidelines to help make the best use of these revenue forecasts—that is, to help them focus on the right questions, avoid overreactions, and be better positioned for the unexpected.
Cannabis Tax Revenue Update (2024 Q4) March 6, 2025
Our new cannabis tax revenue estimates are very similar to the revenues anticipated by the Governor's Budget.
Firearms and Ammunition Revenue Update February 21, 2025
In the first half of 2024-25, preliminary revenue for the firearms and ammunition excise tax was $29 million.
Cannabis Tax Revenue Update (2024 Q3) December 3, 2024
Our new forecast for 2024-25 cannabis tax revenue is $653 million, somewhat lower than the May Revision forecast of $695 million.