GO
Loading...

US states' revenues extend fall in second quarter: Report

Adam Gault | OJO Images | Getty Images

Revenues for most U.S. states continued to fall in the second quarter, with 36 states reporting an overall decline of 0.8 percent from the same period in 2013, according to a report released on Thursday.

The Nelson A. Rockefeller Institute of Government, a public policy research unit of the State University of New York, which closely monitors state budgets, said that in the first quarter of this year, total state tax collections posted a decline of 0.3 percent—the first drop recorded in four years.

In the second quarter, the contraction persisted due to a 6.5 percent drop in the largest revenue category for states, personal income taxes. The quarter includes April, a key month for personal income taxes due to the federal filing deadline.

Due to a change in the federal tax code, states saw a surge in revenue in 2013. Taxpayers sold off investments, paid bonuses and made other financial moves in the final hours of 2012 as the so-called Bush tax cuts expired.

Read MoreWhy some investors think oil's bull run is done

This created a bulge of taxable income in April 2013 with total state revenue surpassing its pre-recession peak when adjusted for inflation that year.

But in 2014, the states have had to deal with a lingering hangover. Many prepared for a revenue drop this April, but were surprised by its magnitude.

Sales tax collections, meanwhile, likely grew 4.5 percent in the second quarter from a year earlier.

The U.S. Census has reported that total state tax revenue was $206.8 billion in the first quarter, down 0.3 percent from the same quarter of 2013, and individual income tax collections fell 1.4 percent, to $72.6 billion. Nonetheless, income taxes were much higher than sales tax collections, following a trend that began in 2011, the Census said.

—By Reuters

Contact Earnings

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More