NJ.com- New Jersey's tempestuous tax on corporations continued to drag down state revenues in the first four months of the fiscal year that began in July, the state Treasury Department reported Tuesday.
Corporation business taxes were down nearly 19 percent compared with this time last year. And combined with slow casino, petroleum products, alcoholic beverage and tobacco wholesale taxes, the state missed its projected growth rate of 3.4 percent through October. Instead, revenues grew by 2.9 percent.
"The exceptionally robust performance from corporation business tax collections in fiscal year 2015 has not carried over to 2016, thus far," the department said in a statement. "As the department has said previously, this tax is extremely volatile and can be disproportionately affected by just a few large taxpayers."
Gross income and sales tax collections, however, surpassed their projected growth rates. The gross income tax, a levy on personal income, is the state's largest source of revenue, and rose 4.3 percent, ahead of its 3.9 percent projection. That represents a slowdown from this time last month, when income taxes were 8.1 percent ahead of the same time in 2014. Officials warned at the time, though, that those September gains were partially driven by an extra pay period.
Income from sales taxes was "particularly strong" though October, treasury officials said, with a 4.5 percent hike over last year, ahead of the 2.9 percent officials were predicting.
With 19.7 percent bump over last year, the duo of death taxes — estates and inheritance — continued to outperform their target, as well.
The annual budget is built on revenue estimates certified by Gov. Chris Christie, and the state could have to make budget cuts late in the year if tax collections don't live up to those projections.
New Jersey has wrestled with accurately predicting tax revenues in recent years. In 2014, Christie was forced to cut $2.4 billion in funding for pensions over two years after tax revenue came up short.
But observers weighing in earlier this year suggested that such last-minute actions may not be needed this year because of the administration's more modest revenue expectations.