State Revenues Take a Hit in the Second Quarter of 2023 - State Tax and Economic Review, 2023 Quarter 2

State Tax Revenues in the Second Quarter of 2023 Total state government tax revenue collections declined 12.8 percent in nominal terms and 15.7 percent in real terms in the second quarter of 2023 relative to a year earlier, according to US Census Bureau data adjusted by the author (table A1).3 Personal income tax revenues declined 30.1 percent and corporate income tax revenues declined 13.8 percen. [...] The boost in state tax revenues in fiscal year 2022 was driven by the following factors: the robust stock market observed throughout 2021, the record number of initial public offerings in 2021, the high inflation rate, the boost in spending on taxable goods caused by the COVID-19 pandemic, and the expectation of potential (if unrealized) federal tax hikes (Dadayan 2022a). [...] Final Payments Final tax payments typically account for a small share of total personal income tax revenues in the first, third, and fourth quarters of the tax year and a much larger share in the second quarter due to the April 15 personal income tax filing deadline.8 Final payments accounted for 33.7 percent of all personal income tax revenues in the second quarter of 2022 and 27.8 percent in the. [...] S T A T E T A X A N D E C O N O M I C R E V I E W , 2 0 2 3 Q U A R T E R 2 1 9 Refunds By definition, personal income tax refunds represent a negative share of personal income tax revenues and usually are a small amount in the third and fourth quarters of the tax year and a much larger negative amount in the first and second quarters of the tax year. [...] Sales tax collections declined in the Far West and Rocky Mountain regions but increased in the rest of the regions for the second quarter of 2023 compared with the same period in 2022.