Nebraska netted $453 million in taxes in January, annual revenues higher than before pandemic

Nebraska netted $453 million in taxes in January, annual revenues higher than before pandemic

Nebraska’s January state tax revenue report was released this morning and it shows a very strong picture for the Cornhusker State, despite some in Washington continuing to claim that states need more federal aid.

January net receipts were $453 million. That is 19.1% above the forecast.

  • Net Sales and Use: 14.5% above forecast
  • Net Individual Income: 19.4% above forecast
  • Net Corporate Income: 93.3% above forecast
  • Net Miscellaneous: 21.7% above forecast

However, the real question for many is, “How does this compare to January 2020 tax collections?” Thankfully, I know where to find that information. January 2020 net tax collections were $468 million, which places Nebraska at $15 million less than where we were last year.

If actual collections are lower this year than last year, does that mean Nebraska is still hurting compared to pre-pandemic levels? Well, looking at one month in isolation is not the best methodology to answer that complex of a question. A better measure would be the tax collections for the fiscal year.

Net General Fund tax collections for this fiscal year are $3.321 billion.

  • Net Sales and Use: 11.3% above forecast
  • Net Individual Income: 8.6% above forecast
  • Net Corporate Income: 6.7% above forecast
  • Net Miscellaneous: 5.1% above forecast

Compare that with the same time last year and net General Fund tax collections were $2.961 billion. That is a $360 million increase compared to last fiscal year.

Some of this surplus can be accounted for moving the tax filing deadline from April 15 to July 15 in 2020, but not all of it. Being able to compare to the previous year’s collections gives context and is better for knowing the state’s true revenue picture than comparing to the forecast, which is an educated guess of what the state will collect.

That is why Sen. Linehan’s LB180 is so important. LB180 requires the Department of Revenue to include a comparison of actual net revenues not only to the forecasted amount, but also to the same month of the previous fiscal year.

The next revenue forecasting meeting will be later this month and will set the tone for the state’s budget.

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