News Release

INDIANAPOLIS — The monthly revenue report for August 2023 Indiana tax collections was released Monday, Sept. 11, by the State Budget Agency.

Information on the latest forecast is available at https://www.in.gov/sba/2837.htm.

See data tables here.

Fiscal Year 2024 began on July 1, 2023, and ends June 30, 2024.

Results

• General Fund revenues for August totaled $1,474.1 million, which is $42.8 million
(3.0%) above estimate based on the April 19, 2023, revenue forecast but $75.4
million (4.9%) below revenue in August 2022.

Notably, better-than-expected collections from individual income tax and interest
outweighed lower-than-expected collections from sales tax and corporate
adjusted gross income tax.

Differences relative to monthly estimates and prior year actuals will be influenced
by various factors including payment timing, federal policy actions, and changes
to law.

• Sales tax collections totaled $861.5 million for August, which is $29.5 million
(3.3%) below the monthly estimate but $0.02 million (0.0%) above revenue in
August 2022.

Comparisons relative to monthly estimates and prior year actuals will be
impacted by HEA 1001-2023 which removed the allocation of gasoline use tax
collections to the General Fund, beginning in FY 2024.

Monthly collections attributable to sales tax were $23.0 million below the monthly
estimate but $16.0 million (1.9%) above prior year actuals. The August
performance of 1.9% year-over-year growth, which mostly reflects July economic
activity, compares to 5.2% year-over-year growth for FY 2023.

Year-over-year differences and fluctuations from month-to-month are expected
as outlined by the evolving economic, seasonal, and policy dynamics presented
in the April 2023 revenue forecast. Sales tax collections excluding gasoline use
tax are projected to grow by 4.1% year-over-year for FY 2024 compared to 5.2%
in FY 2023, 9.9% in FY 2022, and 13.9% in FY 2021.

Beginning in FY 2024, gasoline use tax is no longer allocated to the General
Fund. As a result, gasoline use tax monthly collections came in $6.5 million
below the monthly estimate and $16.0 million (100.0%) below prior year actuals.
HEA 1001-2023, which passed after the April 19, 2023 revenue forecast,
changed the allocation of gasoline use tax.

• Individual income tax collections totaled $503.9 million for August, which is $51.3
million (11.3%) above the monthly estimate but $108.1 million (17.7%) below
revenue in August 2022. Year-over-year comparisons are impacted by the
reduction in the state individual income tax rate (effective January 1, 2023) and
more.

Monthly collections related to tax withholdings came in $70.7 million above the
monthly estimate and $14.6 million (1.8%) above the prior year actuals. The
August performance of 1.8% year-over-year growth mostly reflects July
economic activity.

For perspective, August withholdings tax collections are better interpreted
relative to the current year monthly estimate because August 2022 was positively
impacted by the five Fridays effect and August 2023 was not. Historically, the
number of Fridays affects the timing of payments from month to month, and the
revenue impact has typically been between 10 to 20 percent greater whenever a
month has the fifth Friday compared to the more common four Fridays in a
month.

Other monthly individual income tax collections, net of refunds, came in $19.4
million below the monthly estimate and $122.7 million (63.5%) below prior year
actuals. In a lower activity month like August, the timing of payments and
refunds, including late payments, is a major driver of differences relative to
monthly estimates and prior year actuals.

With important quarterly payment due dates, September, January, April, and
June are the most important revenue months for individual income tax.

• Corporate tax collections totaled $0.5 million for August, which is $8.4 million
(94.0%) below the monthly estimate and $9.3 million (94.5%) below revenue in
August 2022.

Differences relative to monthly estimates are likely as various factors may impact
monthly revenue activity including payment and refund timing, late payments,
and more.

With important quarterly payment due dates, September, December, April, and
June are the most important revenue months for corporate taxes.

• Riverboat wagering tax collections totaled $5.4 million for August, which is $3.7
million (220.4%) above the monthly estimate and $3.3 million (148.5%) above
revenue in August 2022.

• Racino wagering tax collections totaled $9.8 million for August, which is $1.1
million (10.2%) below the monthly estimate and $0.7 million (6.2%) below
revenue in August 2022.

Commentary From State Budget Agency

Year-to-date General Fund revenues totaled $3,075.0 million, which is $50.8 million
(1.7%) above the April 2023 revenue forecast and $42.7 million (1.4%) above
revenues through the same period in the prior fiscal year.

Year-to-date sales tax collections totaled $1,738.6 million, which is $57.2 million
(3.2%) below the April 2023 revenue forecast and $7.5 million (0.4%) below
collections through the same period in the prior fiscal year.

Year-to-date collections attributable to sales tax excluding gasoline use tax are $44.6
million (2.5%) below the April 2023 revenue forecast but $22.5 million (1.3%) above
collections through the same period in the prior fiscal year.

Year-to-date individual income tax collections totaled $1,069.8 million, which is $66.3
million (6.6%) above the April 2023 revenue forecast but $11.8 million (1.1%) below
collections through the same period in the prior fiscal year.

Year-to-date corporate tax collections totaled $21.7 million, which is $12.2 million
(35.9%) below the April 2023 revenue forecast and $21.7 million (50.0%) below
collections through the same period in the prior fiscal year. Year-over-year comparisons
are impacted by the repeal of the utility receipts tax and utility services use tax as well
as other factors such as timing of payments and refunds, additional changes in law, and
more.

Comparisons to estimates and prior-year actuals will be better interpreted over the April
and June months since those months are the two highest revenue activity months.
As previously noted, monthly collections and comparisons relative to monthly estimates
are better interpreted looking at the full fiscal year perspective. In addition to the factors
mentioned throughout this commentary, various aspects to consider include federal
policy actions, temporary and seasonal economic dynamics, interest rates, and more.