Mid-September tax revenues running ahead of last year’s pace

Colin A. Young

BOSTON – With lawmakers poised to vote this week on a tax relief package expected to total more than half a billion dollars in this budget year, the Department of Revenue recently gave the Legislature an update on tax revenue collections.

Revenue Commissioner Geoffrey Snyder told leaders of the House and Senate Ways and Means committees last week that DOR hauled in $2.42 billion in the first half of September, which is $76 million or 3.2 percent more than what was collected during the same period in September 2022.

September’s full-month revenues will be due from DOR by Oct. 4 and the administration has established a benchmark of $4.337 billion for the month’s collections. That would be $139 million above actual September 2022 collections. By Sept. 15, DOR had collected about 55.8 percent of what it expects to have collected by the end of the month.

“In general, September is a significant month for revenues because many individuals and corporations are required to make estimated payments. Historically, roughly 10% of annual revenue, on average, has been received during September, making it the third or fourth largest revenue month of the year,” Snyder wrote in his mid-month revenue letter. He added that the mid-September results “show increases in withholding, income estimated payments, sales and use tax, and corporate and business tax, partially offset by an increase in income tax refunds and decreases in all other taxes.”

Through the first two months of fiscal 2024, DOR had hauled in $5.096 billion in tax revenue, $89 million or 1.8 percent more than collections during the same time period of fiscal 2023, but $21 million or 0.4 percent less than DOR’s year-to-date benchmark.

Top legislative Democrats who agreed in principle to a yet-unreleased tax relief package set aside $581 million in the fiscal year 2024 state budget to cover tax relief impacts this budget year. Depending on which provisions negotiators folded into the final tax package, the annual cost of relief could eventually rise as high as $1.1 billion.