Revenue cushion climbs after October to nearly $180M

Massachusetts
internal revenue service_594560

BOSTON (SHNS) – Spending by the end of the year often exceeds original appropriations, and the Legislature now has a nearly $180 million revenue cushion one-third of the way into the new fiscal year.

Massachusetts collected $1.838 billion in tax revenue last month, beating the monthly estimate by $58 million, the Department of Revenue announced late Friday.

October tax collections surpassed the monthly benchmark by 3.3 percent and were $45 million, or 2.5 percent, greater than actual collections in October 2016. So far this year, tax collections have been $178 million, or 2.2 percent, more than the year-to-date benchmark.

Greater-than-expected corporate and business tax collections helped bolster monthly totals, state revenue officials said.

“October’s results were consistent with our expectations for steady, modest growth. The main driver for October revenues exceeding the monthly benchmark was a surplus in corporate and business taxes, which include some one-time revenue events, while withholding and regular sales taxes were slightly behind expectations,” Revenue Commissioner Christopher Harding said in a statement. “With just under one-third of anticipated FY18 revenues collected, our overall tax revenue collections remain closely aligned with our forecast.”

Income tax collections last month were “approximately on target,” withholding collections were $11 million below the monthly benchmark, sales and use tax collections were $3 million above the monthly benchmark, and corporate and business taxes were $41 million above the monthly benchmark, DOR said.

October is “a relatively small net tax collection month,” DOR said, because no quarterly estimated payments are due for individuals or most corporations. Refunds are high in October due to “the processing of refunds for returns filed on extension,” DOR said.

Through one third of the fiscal year, tax revenue collections have totaled $8.183 billion, DOR said, which is $178 million or 2.2 percent above the year-to-date benchmark and $205 million or 2.6 percent greater than the same time period in 2016.

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