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January Revenue Report Strong, Sales Tax Revenue Lags

January revenues were higher than predicted, but sales tax revenues are falling short of predictions for this fiscal year.

cash register

Photo: Andrew Ferguson (flickr)

Indiana has not collected as much sales tax as was originally predicted.

In order to meet projections for this fiscal year, state tax collections need to increase 1.5 percent. Through the first seven months of the fiscal year, revenues have increased four percent, putting the state $176 million ahead of projections.

Indiana had a particularly strong January, $106 million above target, but that is due in large part to individual income tax collections, which were strong last month because of a delay at the IRS in accepting tax returns.  Sales tax collections suffered, more than $27 million below projections for the month.

Still, state Office of Management and Budget director Chris Atkins says it is not cause for concern.

“We’re still up year-over-year, you know, compared to where we were in 2012,” he says. “We’re actually healthily up about four percent compared to where we were in January so it’s not a concern.”

Atkins says as long as sales tax revenues continue to improve based on last year, the state will be fine and suggests the figures being below target says more about a need to review the state’s projections.

Brandon Smith, IPBS

Brandon Smith, IPBS has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

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