Home Heartland Square Arizona Arizona tax revenues showed ‘strong growth’ last month, but ‘significant uncertainty’ remains...

Arizona tax revenues showed ‘strong growth’ last month, but ‘significant uncertainty’ remains for the year

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Arizona state government’s tax revenues saw “strong growth” in September with a boost of nearly 12 percent, according to the state’s legislative budget committee.

“The strong growth during September occurred in all of the state’s large revenue categories,” a monthly budget report by the Joint Legislative Budget Committee staff said.

General fund revenues were up by 11.8 percent – $119.9 million more than forecasted – and now total $1.16 billion, according to the report. 

The committee said sales tax collections increased by 6.9 percent last month, while individual income tax collections increased by 9.9 percent, or $48.2 million more than forecasted, and revenue from corporate income tax collections were up by 15.8 percent. The committee attributed the sales tax collection increases to spending in retail, contracting, and restaurants and bars. 

Overall year-to-date general fund revenues are up 8.7 percent compared to last year with $178.6 million more than forecast, the report said.

The committee did note there is “significant uncertainty” in how general fund revenues will perform in the second half of the fiscal year, citing changes to the state income tax code. 

“Given the broad-based tax changes (such as increasing the standard deduction) and that taxpayers are unlikely to actively adjust their withholding, these changes are likely to start impacting state revenues during tax filing season in the spring of 2020, as taxpayers receive larger refunds or owe smaller payments,” the report said.