Iowa tops $8 billion in gross tax collections for first time

DES MOINES - State net tax receipts finished the 2015 fiscal year up $376.7 million from the previous year and above the projected annual growth rate set by the state Revenue Estimating Conference according to figures released Wednesday.

State tax collections rose by $26.4 million last month over June 2014 receipts, bringing overall growth for the 2015 fiscal year that ended on Tuesday to just over $6.67 billion - a 6 percent yearly growth rate that topped the 5.5 percent REC expectation, according to the Legislative Services Agency's monthly report. The three-member forecasting panel projected the state treasury would take in more than $6.643 billion.

'Everything was growth for the year. Everything was positive,” said Jeff Robinson, a senior LSA tax analyst. 'Everything came in kind of as planned or a little bit better and I think it shows that at least for the near future we're still doing well.”

The better-than-expected growth was fueled by a 5.8 percent increase in personal income tax collections, which came in $232.4 million above fiscal 2014 and topped REC projections by more than a full percentage point.

Robinson said the strength in personal income tax receipts reflected increased tax withholdings, which was an indication 'you're seeing more jobs out there and probably they're paying better.”

Sales and use tax receipts also grew but the 4.2 percent increase was slightly under the REC growth projection based upon the $110.8 million boost in overall receipts compared to the previous fiscal year, according to the monthly report. Corporate income tax receipts also grew by 4.9 percent over the previous year for a $26.7 million increase - all indications that Iowa's economy is 'still chugging along good,” Robinson noted.

Fiscal 2015 marked the first time that gross state tax collections topped the $8 billion mark at $8.091 billion, but the net number was reduced when tax refunds of $961.3 million and school infrastructure collections refunds totaling $459.4 million were backed out of the overall gross tax receipts, according to the LSA report.

The three-member REC has set a preliminary growth estimate of 6 percent for fiscal 2016, which began July 1. But Robinson said that likely will be lowered slightly since the just-ended fiscal period came in about $34 million above growth projections and that figure may be adjusted once accruals are tabulated at the close of fiscal 2015 books in September.