Sales and Corporate Collections Drive Increase
Preliminary revenue estimates by the Department of Revenue (DOR) released late last week reveal that the state of Wisconsin brought in 6.6 percent more tax revenue in the March 2022 fiscal year compared to March 2021, driven largely by strong sales and corporate numbers. This increase in GPR year-over-year is more than $850 million.
Tax relief enacted in 2021 in the form of tax rate cuts and lower withholding from paychecks had an impact. Individual income tax collections in the month of March alone are down very slightly, running about $4 million less than the month of March 2021, a decrease driven by a sharp decline in individual income tax collections of $165 million.
That’s good news. Thanks to legislative Republicans, taxpayers will spend or save that $165 million themselves, instead of handing it over to grow an already-bloated government. The department indicates that individual income tax collection declines are expected to continue, a positive for taxpayers who need that cash to cope with high inflation.
Sales and corporate tax collections are each up over the year by over 12% according to these preliminary figures, more than balancing out the lower individual income tax collections, resulting in the overall 6.6 percent increase. The overall tax collection increase would normally be promising for potential future economic growth, but the current inflationary trend means that while sales tax collections increase, taxpayer’s buying power is decreasing.
The next quarter’s numbers to be released in June will reflect the end of the state’s fiscal year and provide a fuller picture of the impacts of the economic position of the state.
The release from DOR can be seen here.