BOSTON (SHNS) – The state is flushed with cash, so much so that the surplus tax revenue has to be returned to taxpayers. But, a new report is saying that the state isn’t taking everything into account.
Roughly 3.6 million taxpayers are to receive money back under Chapter 62F, but a new report is saying too much money is set to be returned. Chapter 62F is a 1986 voter-approved law that caps allowable state tax collections at a level that is tied to annual wage and salary growth. Revenue above said cap is to be returned to taxpayers through a credit.
Last month, Auditor Suzanne Bump certified that $2.9 billion needed to be returned. However, a new report from the left-leaning Massachusetts Budget and Policy Center believes that the auditor’s figure is overstated by $1.4 billion.
The report states this is not because the auditor miscalculated, but because the law is fundamentally flawed. MassBudget points to how the report does not deduct most pending pass-through entity excise tax credits.
The auditor said in a Statement, “Chapter 62F requires that all revenue be counted even if, as in this case, tax law requires that much of it will be debated later.”
The report also touched on how Chapter 62F favors high-income households and states that nearly 53% of taxpayers with incomes under $25,000 will not receive any money back. Qualifying taxpayers are set to receive their Chapter 62F return in November.