2022 Financial Condition Report

For Fiscal Year Ended March 31, 2022


2022 Financial Condition Report
For Fiscal Year Ended March 31, 2022

State Tax Collections Increased Significantly in SFY 2021-22 from $82.4 Billion to $121.1 Billion

  • In SFY 2021-22, reported New York State tax collections increased by 47 percent, primarily reflecting the economic recovery as well as temporary tax rate increases included in the SFY 2021-22 Enacted Budget.
    • Personal income tax (PIT) collections grew by 28.6 percent due, in part, to the increase in tax rates for those with incomes over $1.1 million (the top tax rate equal to 10.9 percent for incomes over $25 million).
    • PIT collections also benefited from a 12.4 percent increase in financial industry profits, resulting in an estimated 21 percent increase in securities industry bonuses.
    • Corporate franchise taxes increased by 46 percent, resulting from higher tax rates in addition to large corporate profit growth.
Bar chart of Total State Tax Collections

The Pass-Through Entity Tax (PTET) Went into Effect, Inflating Collections

  • The PTET provides a way for certain taxpayers to avoid the $10,000 limit on federal itemized deductions for state and local taxes (SALT) by imposing the tax on the business entity (S-corporations, LLCs, and partnerships), rather than imposing the PIT on individual members of the business. PTET collections totaled $16.4 billion in SFY 2021-22.
  • Members of the business entities are authorized to claim a PIT credit for their shares of the PTET paid. Affected taxpayers were not allowed to adjust their tax year 2021 estimated PIT payments for the amount of the tax credit; accordingly, SFY 2020-21 results are distorted due to both PIT and business tax payments having been received, but offsetting PIT credits not having been claimed.

The State Budget Relies Heavily on the Personal Income Tax

  • Personal income tax collections:
    • Made up 58.4 percent of New York State’s tax collections in SFY 2021-22.
    • Were lower than the 67 percent in SFY 2020-21 due to increased business collections relating to the PTET.
  • Oregon and California had a greater reliance on the personal income tax, 63.2 percent and 59 percent of total tax collections, respectively. Nationwide, over one-third of the states rely more heavily on sales and user taxes.
Bar chart of Total State Revenues by Revenue Type
Pie chart of SFY 2021-22 State Tax Collections by Tax Type

Tax Burden Increases

  • The combined federal, State, and local tax burden in New York State was $372 per $1,000 of personal income in fiscal years ending in 2021, an increase from $327 in fiscal years ending in 2020.
  • At the local level, property tax revenues are the largest single tax source overall. Nearly 66 percent of all property taxes in New York are collected by school districts.
Pie chart of Taxes of New York Taxpayer per $1,000 of Personal Income
Pie chart of Share of Property Tax by Government Entity in 2021 (Excluding NYC)