by: Chris A. Young, State House Intelligence
Posted: Apr 5, 2021 / 8:02 pm EDTUpdated: April 5, 2021 / 8:02 p.m. EDT
BOSTON (SHNS) – The Treasury Department raised more than $ 3 billion from Massachusetts residents, workers and corporations last month, again shattering Baker government expectations and increasing the treasury by more than $ 1.5 billion year above the state of the last time.
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 to fiscal 2021, the Massachusetts state government has collected $ 22.588 billion in taxes from people and businesses. That was $ 1.524 billion, or 7.2 percent, more than the nine months leading up to the fiscal 2020 pandemic. The last month in Massachusetts, September saw a year-over-year decline in tax revenue.
Over the past three months, actual tax revenues have thrown DOR’s monthly benchmarks out of the water. The collections in January exceeded the benchmark by 14.7 percent, the collections in February exceeded the benchmark by 24.8 percent and now sales in March 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.
But it would still be around $ 611 million less than the pre-pandemic estimated 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’s corporate returns are not due until April 15, some corporate returns came in in March, causing this category to grow when compared to the benchmark and previous year collections. 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 filing season and recent changes in tax law, including the extension of state and federal individual income tax filing deadlines from April 15 to May 17.” However, these tax refunds may catch up as the filing season progresses. “
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.