STATE HOUSE MESSAGE SERVICE
THE DEPARTMENT FOR REVENUE In the past month, more than $ 3 billion was raised from Massachusetts residents, workers, and businesses, yet again shattering Baker government expectations and raising the treasury by more than $ 1.5 billion more than last time Year posed.
The revenue collections for March totaled $ 3.061 billion – $ 402 million, or 15.1 percent, more than in March 2020 and $ 648 million, or 26.8 percent, more than the Baker administration last month expected.
Now, nine months through fiscal 2021, the Massachusetts state government has collected $ 22.588 billion in taxes from people and businesses, up $ 1.524 billion, or 7.2 percent, over the nine months preceding Fiscal 2020 pandemic. Last month, Massachusetts saw tax revenue declined year over year in September.
The announcement follows an analysis in CommonWealth by Evan Horowitz of the Center for State Policy Analysis at Tufts University, which explained why sales forecasters have missed so badly and what can be done to prevent it from happening in the future.
In the past three months, actual tax revenues have knocked the Treasury Department’s monthly benchmarks out of the water. The January collections exceeded the benchmark by 14.7 percent, the February collections exceeded the benchmark by 24.8 percent and now March sales were 26.8 percent above expectations.
If the collections match exactly the DOR benchmarks for April, May, and June, Massachusetts has tax revenue of $ 30.539 billion in fiscal year 2021.
That would be $ 1.45 billion more than the Baker government forecast it would raise this fiscal year when it last updated its expectations, $ 943 million, or 3.1 percent, more than fiscal 2020 and around 419 million US dollars more than the consensus agreement will be used to create the budget for the upcoming 2022 fiscal year.
The over-benchmark collections, if persisted, could result in a sizeable surplus by the end of fiscal 2021 this summer, which would come right when state officials make decisions about how billions of dollars should be spent on federal aid for the US bailout . Budget scribes in the legislature and in the Baker administration have expressed an interest in using the available income to limit the raffle on rainy days.
The good news in terms of tax revenue comes as Massachusetts corporate confidence surged to enthusiastic levels in March, driven by progress on COVID-19 vaccination and the final passage of the $ 1.9 trillion federal spending bill was promoted.
The Associated Industries of Massachusetts monthly confidence index rose 4.5 points last month and has gained 11.6 points since December. At 60.9 on a scale from 0 to 100, the index is now comfortably in positive territory towards spring, which is a complete reversal from last year.
While the state’s unemployment rate continues to rise at 7.1 percent, employers have continued to create jobs in recent months and are more optimistic about the economic and vaccination outlook than about the continued surge in virus cases, according to the survey of around 140 Employers.
However, the revenue would still be about $ 611 million below the pre-pandemic tax revenue of $ 31.15 billion for fiscal 2021.
DOR regards March as the “medium-sized month” for tax collection and usually ranks sixth among the twelve months. The agency said all income tax receipts for March were $ 178 million above benchmark, sales and use taxes were $ 95 million above benchmark, corporate and corporate taxes were $ 274 million above benchmark and the All Else Category ended $ 101 million month ahead of benchmark expectations, according to DOR.
“Revenue in March included increases in withholding taxes and unrelated income taxes, corporate and corporate taxes, all other taxes, and sales and use taxes. Although the C-Corporation’s returns won’t be due until April 15, some corporate return payments were received in March, increasing this category compared to the benchmark and collections of the previous year. The increase in “other taxes” is mainly due to estate taxes, a category that tends to fluctuate, “said Revenue Commissioner Geoffrey Snyder.
“Income tax reimbursement is below target due to the late start of the tax season and recent changes in tax law, including the extension of state and state income tax filing deadlines from April 15 to May 17.” However, these tax refunds may change over the course of the filing season. “
DOR announced last month that it had postponed the deadline for filing tax returns for individuals to May 17 to coincide with the deadline for federal tax. This could require adjustments to the agency’s monthly estimates and benchmarks – or possibly a further adjustment to the underlying revenue assumption for the fiscal year ending June 30th.
Michael Norton contributed to this report.
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