The personal income tax is the single largest source of revenue to state governments, representing 46% of total state general fund revenue in fiscal 2018 according to NASBO’s State Expenditure Report. Forty-one states have a broad-based personal income tax. April is typically the month with the highest amount of personal income tax collections. Early indications are that many states experienced a positive “April surprise” this year, seeing strong growth in April income tax collections. The positive April surprise is likely due to several factors including continued growth in the economy, gains in non-withholding including capital gains and dividends, a shift in the amount of estimated payments made in December to higher payments with tax returns in April due to the new federal tax limit on state and local tax deductions, and higher first quarter estimated payments. States will now begin analyzing their collections to understand the amount that may be of one-time nature, such as higher than normal capital gains. This year’s strong gains in April personal income tax revenue will likely help most states meet or exceed revenue projections for fiscal 2019, which ends on June 30th for 46 states.
Below is a compilation of recent press articles detailing states’ April revenue collections: