WASHINGTON (Reuters) - For most U.S. states personal income tax collections likely declined in the first quarter of 2014, bringing to a halt the massive revenue growth states had seen for nearly a year.
The Rockefeller Institute, the public policy arm of the State University of New York, estimated on Tuesday that from January through March personal income tax collections declined 0.4 percent from the same period in 2013, based on data from 45 states.
Overall, states’ tax collections likely only increased 0.7 percent in the first quarter from the first quarter of 2013, according to Rockefeller, which closely monitors states’ fiscal conditions.
The end of federal tax breaks at the end of 2012 created a bulge in state revenue in the first part of 2013, as most states pattern their tax code after the federal one. Personal income tax collections surged after people sold off investments, advanced bonuses and made other moves to take advantage of the so-called Bush tax breaks.
At the same time, a strong stock market generated capital gains.
But the revenue rush ended quickly. By the final quarter of 2013, personal income tax collections were only 0.4 percent higher than in the fourth quarter of 2012, according to Rockefeller.
Reporting By Lisa Lambert; Editing by Leslie Adler