Exhibits of the Chapter 555 Report for Fiscal Year 2019

An overview of the information used to support the conclusions of this report.

Table of Contents

Exhibit I

Calculation to Determine Whether Net State Tax Revenues Exceeded Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019

Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019
(see Exhibit IV)

$33,977,241,799

Less:

 

Net State Tax Revenues for the Fiscal Year Ended June 30, 2019
(see Exhibit II)

30,202,588,989

Net State Tax Revenues (under) Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019

$(3,774,652,810)

Exhibit II

Net State Tax Revenues for the Fiscal Year Ended June 30, 2019

Type of State Tax Collected
(by Agency)

Gross State Tax
Revenues

Refunds and
Abatements

Net State Tax
Revenues

Department of Revenue (DOR):

 

 

 

      Alcoholic Beverages

$86,435,991

$240,931

$86,195,060

      Financial Institutions

22,957,961

3,490,805

19,467,156

      Cigarettes*

554,865,316

1,604,144

553,261,172

      Corporations

3,219,750,855

292,591,141

2,927,159,714

      Deeds

218,567,679

36,064

218,531,615

      Estate and Inheritance

623,539,437

22,233,481

601,305,956

      Income*

18,810,921,634

1,685,088,270

17,125,833,364

      Insurance

419,458,645

18,861,988

400,596,657

      Motor Fuels and I.F.T.A.

779,708,562

4,245,895

775,462,667

      Public Utilities

40,000

0

40,000

      Room Occupancy

284,850,147

1,142,334

283,707,813

      Sales and Use

6,879,742,345

36,786,701

6,842,955,644

      Club Alcoholic Beverages

945,275

19,552

925,723

      Motor Vehicle Excise

101,094

23,821

77,273

      Convention Center Surcharges

17,001,373

 91

17,001,282

      Community Preservation Trust

23,173,800

0

23,173,800

      Controlled Substances

13,948,855

0

13,948,855

      Satellite

8,605,108

0

8,605,108

      Statewide Car Rental

1,096,138

10

1,096,128

Subtotal (Department of Revenue)

$31,965,710,215

$2,066,365,228

$29,899,344,987

Massachusetts Gaming Commission:

 

 

 

      Pari-Mutuel Taxes

788,306

0

788,306

      Gaming Revenue Tax

130,701,550

0

130,701,550

Lottery Commission:

 

 

 

      Beano

697,460

0

697,460

      Raffles and Bazaars

1,123,098

0

1,123,098

State Athletic Commission:

 

 

 

      Boxing Contests

125,966

0

125,966

      Boxer’s Fund

12,643

0

12,643

Division of Insurance:

 

 

 

      Excess and Surplus Lines Insurance

44,848,231

0

44,848,231

Secretary of State:

 

 

 

      Deeds Excise Stamp Tax Fees

99,815,285

0

99,815,285

Department of Unemployment Assistance:

 

 

 

      Workforce Training Contribution

25,131,463

0

25,131,463

Subtotal (Other Agencies)

$303,244,002

$0

$303,244,002

Total (Department of Revenue
and Other Agencies)

$32,268,954,217

$2,066,365,228

$30,202,588,989

*    Includes income tax penalties assessed under Section 2 of Chapter 111M of the General Laws (totaling $16,574,378) and cigarette excise revenue assessed in accordance with Sections 12 and 70 of Chapter 302 of the Acts of 2008 (totaling $113,439,387) credited to the Commonwealth Care Trust Fund (CCTF). Fiscal year 2018 tax revenues credited to the CCTF totaled $130,013,765.

†    International Fuel Tax Agreement.

‡    Includes sales, meals, and room occupancy excise taxes, and service fees for the City of Worcester DCU Capital Improvement Fund.

Exhibit III

Net State Tax Revenue Sources for the Fiscal Year Ended June 30, 2019

A pie chart showing the different sources of net state tax revenue.  There was $17,125,833,364 representing 56% by income tax, $6,842,955,644 representing 23% by sales and use tax, $2,927,159,714 representing 10% by corporations tax, $775,462,667 representing 3% by motor fuel tax, $400,596,657 representing 1% by insurance tax, $553,261,172 representing 2% by cigarette tax, and $1,577,319,771 representing 5% by other taxes.

Exhibit IV

Calculation of Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019

Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2018*

$32,531,393,763

Allowable State Tax Growth Factor for the Fiscal Year Ended June 30, 2019

x 1.0444447

Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019

$33,977,241,799

*    As defined in Section 2 of Chapter 62F of the Massachusetts General Laws, “allowable state tax revenues” for a fiscal year means the following: beginning after June 30, 1986, an amount equal to the greater of the allowable state tax revenues for the immediately preceding fiscal year multiplied by the allowable state tax growth for the current year, or in any case no less than the allowable state tax revenues for the preceding fiscal year. Allowable state tax revenues as disclosed in our prior report (No. 2019-5555-3S) totaled $32,531,393,763.

 

Exhibit V

Calculation of Allowable State Tax Growth Factor for the Fiscal Year Ended June 30, 2019

Calendar Year

Massachusetts Wages and Salaries*
(in Thousands)

Wages and Salaries
Yearly Growth Rate

2015

$233,424,075

 

2016

$246,671,099

1.0567509

2017

$251,844,339

1.0209722

2018

$265,849,684

1.0556111

Sum of 2016–2018 Calendar Year Growth Increase   3.1333342
Allowable State Tax Growth Factor for Fiscal Year 2019 (3.1333342/3)   1.0444447

*           Source: US Department of Commerce, Bureau of Economic Analysis, Regional Income Division, Washington, D.C. (pursuant to Section 2 of Chapter 62F).

†           Wage and yearly growth ratio is calculated by dividing each calendar year’s wages and salaries by those of the previous calendar year.

Note:    Chapter 62F requires that, in calculating the allowable state tax growth factor for any fiscal year, the same total for Massachusetts’s wages and salaries for a calendar year utilized in prior calculations involving that calendar year shall be utilized in subsequent calculations involving that calendar year, notwithstanding periodic adjustments by the Bureau of Economic Analysis.

The fiscal year 2019 allowable state tax growth factor decreased 0.0017428 from the prior year’s factor of 1.0461875.

 

Exhibit VI

Comparison of Net State Tax Revenues for the Two Fiscal Years Ended June 30, 2019

Type of State Tax Collected
(by Agency)

Net State Tax Revenues
for the Fiscal Year Ended
June 30, 2019

Net State Tax Revenues
for the Fiscal Year Ended
June 30, 2018

Increase/
(Decrease)

Percentage
Increase/
(Decrease)

Department of Revenue:

     

 

      Alcoholic Beverages

$86,195,060

$84,977,507

$1,217,553

1.43%

      Financial Institutions

19,467,156

17,442,655

2,024,501

11.61%

      Cigarettes*

553,261,172

594,172,849

(40,911,677)

(6.89)%

      Corporations

2,927,159,714

2,392,154,111

      535,005,603

22.37%

      Deeds

218,531,615

193,540,509

24,991,106

12.91%

      Estate and Inheritance

601,305,956

472,955,859

128,350,097

27.14%

      Income*

17,125,833,364

16,255,654,922

870,178,442

5.35%

      Insurance

400,596,657

363,569,152

37,027,505

10.18%

      Motor Fuels and I.F.T.A.

775,462,667

769,144,085

6,318,582

0.82%

      Public Utilities

40,000

(650,000)

690,000

106.15%

      Room Occupancy

283,707,813

263,448,681

20,259,132

7.69%

      Sales and Use

6,842,955,644

6,491,262,465

351,693,179

5.42%

      Club Alcoholic Beverages

925,723

864,506

61,217

7.08%

      Motor Vehicle Excise

77,273

116,187

(38,914)

(33.49%)

      Convention Center Surcharges

17,001,282

17,177,597

(176,315)

(1.03%)

      Community Preservation Trust

23,173,800

23,793,880

(620,080)

(2.61%)

      Controlled Substances

13,948,855

7

13,948,848

1,992,693%

      Satellite

8,605,108

9,721,141

(1,116,033)

(11.48%)

      Statewide Car Rental

1,096,128

0

1,096,128

NA

Subtotal (Department of Revenue)

$29,899,344,987

$27,949,346,113

$1,949,998,874

6.98%

Massachusetts Gaming Commission:

 

 

 

 

      Pari-Mutuel Taxes

788,306

886,950

(98,644)

(11.12%)

      Gaming Revenue Taxes

130,701,550

68,010,487

62,691,063

92.18%

Lottery Commission:

 

 

 

 

      Beano

697,460

730,836

(33,376)

(4.57%)

      Raffles and Bazaars

1,123,098

1,030,972

92,126

8.94%

State Athletic Commission:

 

 

 

 

      Boxing Contests

125,966

208,390

(82,424)

(39.55%)

      Boxer’s Fund

12,643

33,239

(20,596)

(6,196%)

Division of Insurance:

 

 

 

 

      Excess and Surplus Lines       Insurance

44,848,231

42,681,550

2,166,681

5.08%

Secretary of State:

 

 

 

 

      Deeds Excise Stamp Tax Fees

99,815,285

90,956,209

8,859,076

9.74%

Department of Unemployment Assistance:

 

 

 

 

      Workforce Training       Contribution

25,131,463

24,675,801

455,662

1.85%

Subtotal (Other Agencies)

$303,244,002

$229,214,434

$74,029,568

32.30%

Total (Department of Revenue
and Other Agencies)

$30,202,588,989

$28,178,560,547

$2,024,028,442

7.18%

*    Includes income tax penalties assessed under Section 2 of Chapter 111M of the General Laws and cigarette excise revenues credited to the Commonwealth Care Trust Fund in accordance with Sections 12 and 70 of Chapter 302 of the Acts of 2008.

†    International Fuel Tax Agreement.

‡    Includes sales, meals, and room occupancy excise taxes, as well as service fees for the City of Worcester DCU Capital Improvement Fund.

Exhibit VII

Date published: September 16, 2019
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