Iowa’s revenue report for August has been released and the news for the month was encouraging. Even under the weight of continued inflation and a national recession, the state’s net General Fund revenue was $57 million (6.5%) above the August 2021 net revenue level.
When broken down by the three largest sources of revenue-personal income tax, sales/use tax, and corporate income tax-each category demonstrated monthly growth over 2021 (directly from the LSA Revenue Memo):
Personal income tax receipts totaled $476.2 million, an increase of $24.1 million (5.3%) compared to August 2021.
Sales/use tax receipts totaled $436.3 million, an increase of $43.5 million (11.1%) compared to August 2021.
Corporate income tax receipts received in August 2022 totaled $19.1 million, an increase of $7.2 million (60.5%) compared to August 2021.
Total net receipts YTD are 1.2% less than 2021, impacted by personal income tax (+6.0%), sales/use tax (-14.6%), and corporate income tax (+207.4%).
It is important to note the income tax receipts for FY 2023 are predicted to be lower than last year due to multiple pieces of legislation passed during the 2022 legislative session, including the historical tax cuts enacted in March. As you can see from the chart below, total General Fund revenues for Iowa are closely tracking those from last year so far. With only two months of the new fiscal year completed it may be too early to definitively identify any revenue trends.