Indiana tax changes drive General Fund expectation miss

Indianapolis, Indiana – As per the most recent state revenue report, the tax money that was allocated to the General Fund of Indiana fell short by almost 12% in the previous month.

About $2.7 billion, or $393 million less than anticipated in a state revenue estimate from December, was received by the fund in April.

Nevertheless, the fund is still on pace so far this year, having raised $23 million, or 0.1%, more than anticipated.

A decrease in personal income tax receipts was a factor in the monthly shortfall. Rather of getting $1.8 billion, the state got $1.5 billion, which is $300 million, or 17%, less than expected.

The State Budget Agency commented that because taxpayers have been acclimating to 2023 legislative changes over the past year, there has been “unusual payment timing.”

“Various timing factors impact this month’s withholdings and other individual income tax collections. The below-mentioned performance in withholdings and other individual income tax collections should be interpreted within the perspective of total individual income tax collections and within the fiscal year-to-date trend,” the agency wrote. “These factors are projected to fully normalize over the coming months and month-to-month variations may still occur.”

As of now, the state has exceeded individual income tax predictions by $87 million, or 1%.
Reduced business tax receipts were another factor. Approximately $201 million, or roughly 33%, less than expected was received by the state.

“Differences relative to monthly estimates are likely as various factors may impact monthly revenue activity including payment and refund timing, late payments, and more,” the agency wrote. “Corporate tax collections should be interpreted within the fiscal year-to-date trend.”

However, they’re still around 12% behind estimates for the year.

April is one of four quarterly deadline months, making it a crucial month for company and individual income taxes. A number of legal developments have hampered year-over-year comparisons in both, according to the agency.