Nebraska state revenues continue positive trend in September 2021

Nebraska state revenues continue positive trend in September 2021

Nebraska’s September state tax revenue collections continue to be positive, as all major tax types (sales, personal income tax, and corporate income tax) are posting above forecast.

The only tax type not to meet its expected forecast are miscellaneous taxes. This tax category includes cigarette and tobacco taxes, the state tire fee, mechanical amusement device tax, documentary stamp tax, and others. However, this amount is negligible compared to the other major tax types.

For the month of September, net revenues were 19.2% above forecast, or in excess by $100 million. Corporate income tax collections for the month posted double-digit percentages above forecast at 69.4%.

Nebraska’s corporate income tax collections continue to exceed expectations. This year, the Legislature took a very cautious approach in approving a reduction in the top corporate income tax rate from 7.81% to 7.25% over two years, but as these revenue numbers continue to be positive, it’s clear a faster implementation of the rate reduction is affordable for the state budget. The Legislature intends to eventually to match the top personal income tax rate, which is currently 6.84%.

The more telling numbers, however, are the cumulative revenues for the fiscal year. This is what Nebraska state agencies and the Legislature will use when crafting their mid-biennium budget adjustments in preparation for the 2022 legislative session. For the fiscal year, revenues are 11.7% above the certified forecast, amounting to $156 million.

Here is the breakdown of the net increase by tax type for the fiscal year:

  • Sales and Use – 5.2% above ($27.5 million)
  • Personal Income – 9.8% above ($64.8 million)
  • Corporate Income – 78.6% above ($72.1 million)
  • Miscellaneous – 17.6% below (-$8.6 million)

However, comparing to a forecast can be somewhat misleading, and a more accurate picture of the state’s revenue position is to compare it to last year’s revenue collections. Compared to September of last year, the state is seeing a net 18.72% increase in collections for the month of September amounting to nearly $100 million.

For the cumulative fiscal year, which started in July, the state is seeing 9.84% less compared to the previous  year. This is due to the change in tax filing deadline because of the COVID-19 pandemic. It’s nothing to be too concerned about since September’s collections are posting well above expected amounts.

See the story below for more information on how collections were skewed due to the adjusted tax filing deadline, as well as revenue information for the previous month.

August general fund revenues exceed expectations

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