State tax revenue collections for the month of September were strong, as all three major revenue categories experienced strong growth according to the non-partisan Legislative Services Agency.
Leading the revenue growth this month was personal income tax, which generated $449.5 million in collections. This amount is 17 percent higher than what came in during last September. This continues the trend of sustained growth in personal income tax payments this fiscal year. Through three months, personal income tax collections are up 9.8 percent. The growth is being seen in all three categories – withholding payments, estimated payments, and payments with returns.
Sales and use tax collections also rose in September, with $288.6 million collected. This is an increase of $17.9 million (6.6 percent) over September 2021 figures. The growth in sales tax collected in August and September were not enough to offset the dip experienced in July. For the first quarter of FY 2023, sales and use tax payments are down 9.1 percent, significantly off the March REC projection of a 3.6 percent increase.
September is a big month for corporate income tax payments in Iowa, and this past September was no exception. Corporate tax collections for the month came in at $189 million, a 12.1 percent increase over September 2021. Corporate tax returns have been strong all three months of Fiscal Year, with the amount paid to the state in FY 2023 coming in 33.1 percent higher than those three months in Fiscal Year 2022.
Overall, state revenue through September is 5.2 percent higher than what the state collected in the first quarter of Fiscal Year 2022. Iowa’s strong economy is currently bucking the inflationary headwinds created by the Biden administration.
Fiscal Year 2022 Final Numbers
The September revenue report also provided the final revenue numbers for Fiscal Year 2022. According to LSA, the state’s total revenue figure for the budget year that ended on June 30 amounted to $9.8034 billion. This amount is $1.0028 billion higher than what the state collected in Fiscal Year 2021, or 11.4 percent revenue growth for the year.
The growth is even greater when compared to the revenue projection used to put together the FY 22 budget. In March 2021, the Revenue Estimating Conference predicted that state revenue would total $8.3856 billion in FY 2022. The actual amount was $1.4178 billion more than projected.
Next Revenue Estimating Conference Meeting Set
The fall meeting of the Revenue Estimating Conference has officially been set. As is the tradition, the fall meeting reviews the previous year’s final numbers, updates the forecast for the current fiscal year, and makes a more informed prediction of state revenue for the upcoming year. The meeting will be held on Thursday, October 13 at 1 pm in the Supreme Court chamber (room 103) of the Capitol. The meeting will also be broadcast via the Legislative Services Agency’s YouTube page. Here is the link: https://www.youtube.com/channel/UCZSUBZgLYtz9BgYlmllfW5Q