California income taxes exceeded estimates in February
Withholding strength offset large volume of refunds
Preliminary data from California’s tax agencies shows that February 2024 personal and corporate income tax receipts exceeded the administration’s budget estimates for the month by $415 million (8.5%).
As the Legislative Analyst’s Office (LAO) has noted, personal income tax (PIT) withholding surged late in the month. Withholding exceeded budget estimates for February by $1.16 billion (16.0%). LAO notes that the state “collected an added $500 million on February 20th, relative to last year, which appears to be the single-day withholding from equity compensation packages at several large California technology companies.”
The February withholding surge offset strong refund volume, which was $706 million (21.4%) above estimates for the month for PIT and $418 million (162.3%) above estimates for the month for the corporation tax (CT). (Higher levels of refunds, obviously, reduce net tax receipts.) Other categories of PIT and CT receipts also came in above monthly estimates in February.
The February income tax gains offset a portion of the weak revenue news in December and January, as reported by the Department of Finance Finance Bulletin last month. The bulletin is the authoritative monthly report on “agency cash” tax receipts. Information for other state revenues in February will emerge in this month’s edition a couple of weeks from now.