PARIS: Income tax receipts to the state of Illinois dropped about $135 million in January, the first month with new lower income tax rates.
Gross personal income taxes were off by $124 million and gross corporate income taxes dropped by $11 million last month, according to the Legislature’s Commission on Government Forecasting and Accountability.
The rate for the individual income tax — Illinois’ No. 1 source of revenue — dropped from 5 percent to 3.75 percent on Jan. 1. For corporations it fell from 7 percent to 5.25 percent.
Budget experts had predicted that the lower rates would reduce income tax revenue to the state by about $2 billion this fiscal year (which ends June 30) and $4 billion for the following fiscal year.
The approximate $135 million reduction last month translates to about $1.6 billion on an annual basis.But Jim Muschinske, revenue manager for the COGFA, cautioned not to read much into one month’s worth of tax collections.It’s in part due to the fact that some people didn’t have their withholdings adjusted immediately, plus there’s a timing aspect in that there’s still some money in the pipeline from the higher rates,” he said.
