Massachusetts revenue gains holding up with three months left in fiscal year

Colin A. Young

Collectors at the Department of Revenue took in $3.849 billion in tax revenue in March, with receipts tumbling in at $228 million or 6.3 percent above expectations.

March generally ranks as the sixth most significant month for state receipts and DOR said its March 2023 haul was $10 million or 0.2 percent short of actual collections in March 2022. But after accounting for a pass-through entity excise that has affected state revenue reporting for months, DOR said March’s take was $6 million or 0.2 percent higher than actual collections in March 2022, but just $68 million or 2 percent more than the monthly benchmark. “March collections increased in most major tax categories including withholding, sales and use tax, corporate and business tax, and ‘all other tax’ in comparison to March 2022,” Revenue Commissioner Geoffrey Snyder said. “These increases were partially offset by a decrease in non-withholding income tax due to an unfavorable increase in refunds, as well as a decrease in income-return payments.”

The update on state tax collections comes a few weeks before the House is expected to release its response to Gov. Maura Healey’s tax reform and relief package, and it’s own version of a fiscal year 2024 budget proposal.

Through nine months of fiscal year 2023, Massachusetts has collected approximately $27.501 billion, which is $45 million or 0.2 percent less than collections in the same period of last fiscal year, but $230 million or 0.8 percent above the state’s latest year-to-date benchmark.

After adjusting for the pass-through entity excise, DOR said fiscal 2023 collections are $1.04 billion or 4 percent ahead of actual collections to this point in fiscal 2022, and $72 million or 0.3 percent ahead of its updated year-to-date benchmark.

For April, the most significant month for collections, DOR has set the monthly benchmark at $6.216 billion — $729 million less than actual collections last April. The benchmark for fiscal 2023 collections through April is $33.488 billion. April collections are due to be reported by DOR by May 3. “The big month will be coming in April, of course. That’s the month that we’re all waiting for,” Senate Ways and Means Chairman Michael Rodrigues said last month after estimating that the state had “about $600 million in available surplus with a little over the quarter of the fiscal year still yet to go” when the Senate sent Healey a bill featuring $388 million in spending.