State revenues rose dramatically in December, but state officials are downplaying the numbers.
December net tax receipts totaled $415 million in December, up nearly 10% from the forecast.
Yet, State Tax Commissioner Tony Fulton issues a caution.
“And that’s probably because of the influence of the federal tax reform package that passed,” Fulton tells Nebraska Radio Network. “A number of Nebraskans, in fact, a number of people all across the country rushed to pay their state and local taxes in the year 2017 so they could take advantage of that last tax deduction that was available at the federal level.”
Congress eliminated the deduction for state and local taxes in the overhaul of the federal tax code.
Gross General Fund receipts in December totaled $489 million, 7.9% above the certified forecast of $453 million. While receipts from the sales tax dipped slightly in December, individual and corporate income taxes rose.
Net receipts, after tax refunds are made, totaled $415 million, 9.7% above the certified forecast. Net sales tax receipts came in 6% above the forecast. Net individual income taxes came in 16.3% above the forecast. Net corporate tax receipts were 2.4% higher than forecast.
Receipts in December pushed net General Fund receipts for the current state fiscal year to $2.164 billion, 1.6% above the certified forecast of $2.129 billion.
Fulton says it seems certain taxpayers made income tax payments at the end of the year to insure they could deduct them on their 2017 federal taxes.
“The upshot of all of this is exercise caution when looking at the overage in receipts in December, because we think that’s going to probably level off going forward,” Fulton says. “We won’t know that for sure unless we just watch very attentively to what’s happening in future months.”
Fulton says the trend from Nebraska will become clearer in the following months. . .
“We get more indication (about) what’s going on in the broader term as these months more forward,” according to Fulton. “Certainly, December was good news, but we think we know why we experienced that overage.”