Monday, October 4, 2010
Robert R. Bliss
blissr@dor.state.ma.us
617-626-2369

Collections up $250 million from a year ago; first quarter collections now $205 million over benchmark

Revenue Commissioner Navjeet K. Bal today announced that preliminary revenue collections for September 2010 totaled $2.016 billion, up $250 million or 14.2 percent from the same period a year ago and $197 million above the monthly benchmark based on the FY11 revenue estimate of $19.078 billion.

Tax collections for the first quarter of the fiscal year total $4.755 billion, up $442 million or 10.2 percent above those of a year ago and are $205 million above the year-to-date benchmark.

"The September collection is a dramatic improvement from September 2009, which was down nearly 16 percent from the prior year," Commissioner Bal said. "While we are always cautious in our forecasting, the first quarter FY11 results reflect a growing economy."

Income tax collections for the month totaled $1.042 billion, up $76 million or 7.8 percent, $17 million above the monthly benchmark. Withholding collections were up $38 million, or 5.7 percent, $11 million above benchmark. Income tax cash estimated payments were up $10 million, or 3.1 percent, $10 million below benchmark. Income tax payments with returns were up $18 million, or 69.5 percent, $10 million above benchmark, while income tax cash refunds were down $11 million or 21.9 percent, $8 million below benchmark.

September sales tax collections totaled $400 million and were up $17 million from the same period a year ago, or 4.6 percent, $20 million above the benchmark. Regular sales tax was up $11 million or 4.3 percent, $24 million above the benchmark; meals tax was up $3 million or 3.9 percent; and motor vehicle sales tax was up $3 million or 7.0 percent, $5 million below the monthly benchmark.

September corporate/business tax collections totaled $420 million, up $145 million or 52.8 percent, $152 million above benchmark. Of the corporate/business surplus, $89 million was due to lower than projected refunds, and at least some of that $89 million could be due to later filing of combined returns this year and might be reversed in October and November after combined returns are filed.

Year-to-date, income tax collections are up 6.7 percent, $58 million above benchmark, while withholding is up 5.0 percent, $37 million above benchmark. Year-to-date sales tax collections are up $204 million or 19.1 percent, $15 million above benchmark. Year-to-date corporate/business tax collections are up $52 million or 12.3 percent, $131 million above benchmark.

September sales tax collections marked the first time a month to month comparison with 2009 reflects the increase in the sales tax that took effect on Aug. 1, 2009, but that was not reflected in revenues until September, 2009, given the one-month lag in reporting regular sales tax collections. Much of the growth in September 2010 sales tax collections came in business-to-business sales tax revenue, which increased $14.9 million, or 12.3% from a year ago, while sales tax revenue in the retail sector declined by $5.5 million, or 4.7%, presumably due to the August sales tax holiday, which applied only to consumer, not business, purchases. It is too early to estimate the impact of the sales tax holiday since DOR will monitor sales tax revenue in future months to determine the extent to which the holiday induced consumers to shift sales into August from future months. As has been the case with previous sales tax holidays, as required by law DOR will file a report with the Legislature by Dec. 31 that estimates the impact of the August 2010 sales tax holiday.

FY2011 Year-to-Date Revenue through September 30, 2010 pdf format of September_ytd_revenue.pdf

September 2010 Tax Collection Summary (preliminary as of October 4, 2010) pdf format of September_tax_summary.pdf