July income taxes 16% above projections

Strength stems mainly from strong corporate tax collections on July 16

July 2024 income taxes, inclusive of both personal income and corporation taxes, were $1.26 billion (16.4%) above monthly budget projections based on preliminary data from California state tax collection agencies. July generally is one of the slowest tax collection months of the year in California.

Corporation taxes were $844 million (161.8%) above the monthly projections due to an unusually robust receipt day on July 16. As I noted then, such large single collection days can result from payments by a single corporate entity, but information on payments by specific taxpayers is confidential.

Personal income tax payments in July were $418 million (5.8%) above projections. Withholding from workers’ paychecks was basically on target, with the gains resulting from quarterly and other payments. As of today, August 5, U.S. stock prices (as measured by the S&P 500 index) are up 15% from one year ago and remain 5.8% above the economic projections that undergird the 2024-25 state budget plan.

2023-24 state revenues were an estimated $3.2 billion (1.5%) above budget projections, according to last month’s Department of Finance Finance Bulletin. July 2024 is the first month of the 2024-25 fiscal year. The vast majority of any revenue overage in 2024-25 is likely to be paid to schools and community colleges under Proposition 98’s maintenance factor provisions.