Des Moines, Iowa – As of last Friday, May 3rd, state tax collections were running $350 million ahead of the previous year. That’s a more than 6 percent increase in tax payments to the state over the past 10 months. It’s also 1.5 percent above the prediction a panel of experts made in March.
Jeff Robinson of the Legislative Services Agency says his analysis intentionally included the first few days in May.
That’s mostly because April 30th is the deadline for quarterly income tax withholding payments to the state, as well as quarterly payments of sales taxes. April 30th is also the final day for submitting individual income tax returns to the state.
Based on last year’s data, Robinson expects most income tax refunds to be paid out by the end of May.
There are two other major factors at work in the final seven weeks of the state fiscal year. The state income tax cuts the Republican lawmakers approved in 2018 didn’t go into effect until January of this year, so there’s likely a reduction in state income tax withholding payments.
At the same time, it appears there’s been an uptick in sales tax payments to the state. That’s because GOP lawmakers voted to apply the sales tax to more online transactions, like Netflix subscriptions and Uber rides.