by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Did North Carolina tax revenue spike in January because of federal tax reform? After six months of tracking with FY2017 collections, individual income tax revenues in January were 27 percent higher compared to a year earlier, according to the Office of the State Controller‘s monthly report on the General Fund. A number of companies gave tax cut bonuses to their employees and some raised wages. Contractors and small business owners may also have delayed billing until January to take advantage of the lower federal rates.
Individual income tax revenue will likely not keep the same pace since a portion of the withheld taxes were on one-time bonus payments, and final collections in April may come in below last year because revenue was deferred to 2018.