NYC-WTC_000195490

NYC 9/11 Public Portal Document

K taxpayers with income greater than $50,000 paid 81 percent of the tax. Wage income was 68 percent of total K reported income on resident returns. Capital gains realizations and interest income were the second and third K largest sources of income, accounting for approximately 12 percent and four percent, respectively, of total B reported income. Generally, higher income taxpayers earned most of the nonwage income in the City.

'/ g Administration; The New York City personal income tax has been administered by New York State since i B 1976. All collectipn information received is from the New York State Department of Taxation and Finance. i B Daily collection and refund reports are produced by the Accounting Bureau and sent to the City. At the end of p the month the City receives a letter from the State Comptroller verifying the final amount of personal income F tax revenue by component due to the City for that month, Each nionth the State charges the City for the 6 I administra,tion of the tax, The charge is based on State expenditures for data entry, processing of tax returns i and taxpayer services which can be attributed to the City. For 2000 the administrative charge paid by the City & ■ ? was $34 million. Withholding Tables; Withholding tables are adjusted to reflect changes made to tax rates, standard deductions of the dependent exemption. To implement the New York/City Tax Reduction Act of 1987, withholding tables were adjusted in October 1987, October 1988 and/October 1989. To implement the B temporary surcharge, withholding tables were changed in October 1990 and again in October, 1991 to reflect the implementation of the 14 percent increase. Withholding tables were changed in January 1999 to reflect the expiration of the 12.5 percent surcharge and again in July 1999 to' reflect a reduction in rates due to implementation of the STAR program. Effective January 1, 2000, the City nonresident withholding tables were changed to reflect a reduction in nonresident rates from 0.45 to 0.15 percent on wages, and from 0.65 to 0.375 percent on net earnings from self-employment. The lower rates applied to out-of-state nonresidents only, as in-state nonresidents were exempt from the nonresident earnings tax from July 1, 1999 on. The nonresident earnings tax repeal did not apply to out-of-state nonresidents until April 4, 2000. Effective January 1, 2001, withholding tables were changed to reflect the reduction of the 14 percent surcharge and the last installment of the STAR program. Forecast: The personal income tax revenue forecast has been increased $207 million to $5,398 million in 2001. In 2002, the forecast has been reduced by $67 million to $4,766 million. The forecast reflects the effects of the STAR program tax cut, the nonresident earnings tax repeal, and a 25 percent, on average, reduction ip the 14 percent surcharge, effective January 1, 2001. Moreover, the forecast reflects reductions in personal income tax collections deposited in the general fund due to the TFA retention of $427 million in 2001 Is and $503 million in 2002. Adjusted for these reductions, the personal income tax is forecast to grow 11.1 percent in 2001 and to decline 6.1 percent in 2002, after record growth of 22.0 percent in 2000. The national economic expansion and the concurrent strength of the local economy have fueled robust growth in personal income ta,x revenue in recent years. Historic City employment gains posted in calendar years 1997 through 2000, and record profitability on Wall Street leading to record bonus payouts, boosted personal income tax withholding. The rising tide of asset appreciation has sent the amount of capital gains realizations soaring, adding strength to estimated payments and final returns. In all* personal income tax collections on a common fate and base grew 15.9 percent on average from 1997 through 2000, and are forecast to grow 11.1 percent in 2001.

Withholding is forecast to grow 13.8 percent on a common rate and base in 2001 based on growth in the average wage pf six percent, strong employment gains and a bonus payout on record New York Stock Exchange member-firm profits of $21 billion in calendar year 2000. July through November withholding collections grew 21.8 percent, very high growth for a non-bonus period, while during the December through March bonus period, withholding collections grew 6.3 percent on a common rate and base, a strong showing S\ ■ ' ' H I

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NYC-WTC_000195550