Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Gerald B. Silverman
The new federal tax law likely caused a sharp increase in New York personal income tax receipts in the final month of 2017, as taxpayers sought to take advantage of expiring tax breaks, according to data from the state comptroller.
The state finished its 2017-18 fiscal year with $314.5 million more in tax collections than projected earlier in the year by the state Division of the Budget, Comptroller Thomas P. DiNapoli (D) said in an April 18 statement.
The higher collections were due to a spike in estimated personal income tax payments in December 2017, he said.
The data from DiNapoli comes at a time when state revenue forecasters are struggling to predict how the sweeping 2017 federal tax act ( Pub. L. No. 115-97) will impact state revenue.
New York’s personal income tax receipts totaled $51.5 billion in the fiscal year that ended March 31, up 8.3 percent from the previous fiscal year, according to a report from DiNapoli. Estimated payments were up by $2.8 billion, or 18.8 percent.
Personal income tax receipts spiked by 42.4 percent in December 2017, when compared to December 2016, according to the comptroller’s monthly report for December. The state collected $6.7 billion in personal income taxes in December, compared to $4.7 billion in 2016, according to the report.
“Every single state that has broad-based personal income tax has seen substantial growth in estimated personal income tax payments in the months of December and January,” Lucy Dadayan, senior policy analyst at the Rockefeller Institute of Government, told Bloomberg Tax in an email.
“In December alone, the average growth rate in estimated payments was 69 percent for the nation as a whole,” she said. “Most of the growth is attributable to taxpayer behavior and incentives to shift income from tax year 2018 to 2017 to take advantage of the uncapped SALT deduction.”
Dadayan said another contributing factor could have been a response by hedge fund managers to the federal Emergency Economic Stabilization Act of 2008, which gave them until Dec. 31, 2017, to repatriate accumulated offshore gains.
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