NEW YORK: US state tax revenues returned to growth in the third quarter as income tax collections expanded following decline in the previous quarter.
Total state tax revenue rose 4.5 percent to $204.8 billion, up from $196 billion in the same quarter the previous year.
The reversal from the decline in the second quarter was due to growth in personal income tax, which provided about 35 percent of state tax revenues. Personal income tax grew 3.7 percent to $70.9 billion after shrinking 7.5 percent in the prior quarter.
State revenue rose sharply in 2013 after taxpayers sold off investments, businesses paid bonuses and made other financial moves in the final hours of 2012 as the supposed Bush tax cuts expired. This created a bulge of taxable income in April 2013, with total state revenue surpassing its pre recession peak when adjusted for inflation.
The New York based Rockefeller Institute said the trends observed in the third quarter of 2014 were much anticipated due to the slowly disappearing effect of the fiscal cliff on personal income tax revenues.
