March State revenue collections still growing

Once again, monthly state revenue collections showed strong growth for Fiscal Year 2021. According to the non-partisan Legislative Services Agency, state tax collections in March were $111.5 million more than what was collected in March, 2020. This is a 32.4% increase over the previous year’s figure. Through the first nine months of the fiscal year, General Fund net receipts have grown by 7.1%. This figure is significantly higher than the Revenue Estimating Conference’s latest projection on March 19, when the three-member panel forecast 1.8% revenue growth for the current fiscal year.

Personal Income Tax receipts grew in March, with collections growing by 3.7% over March, 2020. For the year, payments in this category are up 9.2%. The Revenue Estimating Conference is projecting personal income tax collections to increase by 13.2%. As a reminder, these numbers are somewhat inflated as the figures include 2019 tax year payments which were received in July and August due to the filing deadline extension granted by the Governor last March.

Sales and Use Tax collections continued to grow above their FY 2020 levels. For March, the state collected an additional $18.6 million over last year. For the fiscal year, growth in sales and use tax is 5.1% which is ahead of the REC projection of 3.7% growth.

Corporate Income Tax collections were also higher in March, with receipts coming in 17.2% higher than March 2020. For the year, corporate income tax is 33.9% higher than FY 2021. This continues to be ahead of the REC projection, which calls for a 28.6% increase in collections for Fiscal Year 2021.

Tax refund payments were down $60.1 million compared to what was paid out in March 2020, as many Iowans were waiting to file their tax returns thanks to the filing deadline extension for both federal and state income taxes.