First Quarter Income Tax Distributions: Tax Reform Impacts Materialize

The Comptroller’s Office has released the tables of county-by-county breakdowns of the first quarter’s local income tax distributions. See them here.

From the Office’s statement:

The distribution totals $1,080.9 million for the counties, growth of 5.1% over last year (Table 2).

Withholding receipts for the first quarter grew 5.0% year over year.  Estimated payments increased 32.6%.  The large increase in estimated payments is likely the result of taxpayer reactions to expectations of a federal tax cut following the November 2016 election, as well as to the eventual passage of the Tax Cuts and Jobs Act.  Taxpayers who expected a federal tax cut would rationally shift income, to the extent they are able, out of tax year 2016 and into tax year 2017.  Some taxpayers may also have been expecting a cut to the capital gains tax rate, which did not materialize. They may now be taking gains from equities they were holding onto in case of a capital gains rate cut.  Also contributing to the growth in the first quarter distribution, the local tax percentage has increased from around 37.22% to around 37.26%.

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