Exhibits of the Chapter 555 Report for Fiscal Year 2020

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

Exhibit I

Calculation to Determine Whether Net State Tax Revenues Exceeded Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2020

Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2020 (see Exhibit IV)	$35,514,892,070
Less:
Net State Tax Revenues for the Fiscal Year Ended June 30, 2020 (see Exhibit II)	30,164,388,908
Net State Tax Revenues (under) Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2020	$(5,350,503,162)

Exhibit II

Net State Tax Revenues for the Fiscal Year Ended June 30, 2020

Type of State Tax Collected (by Agency)	Gross State Tax Revenues	Refunds and Abatements	Net State Tax Revenues
Department of Revenue:
Alcoholic Beverages	$87,693,318	$72,055	$87,621,263
Financial Institutions	10,169,609	859,024	9,310,585
Cigarettes*	524,774,977	812,154	523,962,823
Corporations	2,817,065,307	293,618,884	2,523,446,423
Deeds	215,866,278	54,503	215,811,775
Estate and Inheritance	725,237,563	25,682,261	699,555,302
Income*	19,181,212,746	1,792,244,047	17,388,968,699
Insurance	445,666,579	30,207,215	415,459,364
Motor Fuels and I.F.T.A.†	711,146,129	3,269,080	707,877,049
Public Utilities	120,228	465,999	(345,771)
Room Occupancy ‡	253,284,970	1,016,684	252,268,286
Sales and Use ‡	6,875,153,470	28,815,719	6,846,337,751
Club Alcoholic Beverages	780,088	30,588	749,500
Motor Vehicle Excise	200,325	5,620	194,705
Convention Center Surcharges	16,686,681	4,691	16,681,990
Community Preservation Trust	42,133,787	0	42,133,787
Controlled Substances and Marijuana Excise	51,684,669	0	51,684,669
Satellite	7,633,593	0	7,633,593
Statewide Car Rental	6,175,839	1,679	6,174,160
Subtotal (Department of Revenue)	$31,972,686,156	$2,177,160,203	$29,795,525,953
Massachusetts Gaming Commission:
Pari-Mutuel Taxes	740,900	0	740,900
Gaming Revenue Tax	187,870,030	0	187,870,030
Lottery Commission:
Beano	480,623	0	480,623
Raffles and Bazaars	857,327	0	857,327
State Athletic Commission:
Boxing Contests	149,890	0	149,890
Boxer’s Fund	22,563	0	22,563
Division of Insurance:
Excess and Surplus Lines Insurance	54,660,063	0	54,660,063
Secretary of State:
Deeds Excise Stamp Tax Fees	98,338,234	0	98,338,234
Department of Unemployment Assistance:
Workforce Training Contribution	25,743,325	0	25,743,325
Subtotal (Other Agencies)	$368,862,955	$0	$368,862,955
Total (Department of Revenue and Other Agencies)	$32,341,549,111	$2,177,160,203	$30,164,388,908

*     Includes income tax penalties assessed under Section 2 of Chapter 111M of the Massachusetts General Laws (totaling $28,146,657) and cigarette excise revenue assessed in accordance with Sections 12 and 70 of Chapter 302 of the Acts of 2008 (totaling $107,706,299) credited to the Commonwealth Care Trust Fund (CCTF). Fiscal year 2019 tax revenues credited to the CCTF totaled $135,852,956.

†     International Fuel Tax Agreement.

‡     Includes sales, meals, and room occupancy taxes, as well as service fees for the City of Worcester Digital Federal Credit Union Arena and Convention Center Capital Improvement Fund.

 

Exhibit III

Net State Tax Revenue Sources for the Fiscal Year Ended June 30, 2020

Note: Percentages are rounded to the nearest whole number.

Exhibit IV

Calculation of Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2020

Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2019*	$33,977,241,799
Allowable State Tax Growth Factor for the Fiscal Year Ended June 30, 2020	X 1.0452553
Allowable State Tax Revenues for the Fiscal Year Ended June 30, 2020	$35,514,892,070

*     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. 2020-5555-3S) totaled $33,977,241,799.

Exhibit V

Calculation of Allowable State Tax Growth Factor for the Fiscal Year Ended June 30, 2020

Calendar Year	Massachusetts Wages and Salaries* (in Thousands)	Wages and Salaries Yearly Growth Rate†
2016	$246,671,099
2017	$251,844,339	1.0209722
2018	$265,849,684	1.0556111
2019	$281,583,345	1.0591825
Sum of 2017–2019 Calendar Year Growth Increase		3.1357658
Allowable State Tax Growth Factor for Fiscal Year 2020 (3.1357658/3)		1.0452553

*            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 2020 allowable state tax growth factor increased 0.0008106 from the prior year’s factor of 1.0444447.

Exhibit VI

Comparison of Net State Tax Revenues for the Two Fiscal Years Ended June 30, 2020

Type of State Tax Collected (by Agency)	Net State Tax Revenues for the Fiscal Year Ended June 30, 2020	Net State Tax Revenues for the Fiscal Year Ended June 30, 2019	Increase/ (Decrease)	Percentage Increase/ (Decrease)
Department of Revenue:
Alcoholic Beverages	$87,621,263	$86,195,060	$1,426,203	1.65%
Financial Institutions	9,310,585	19,467,156	(10,156,571)	(52.17%)
Cigarettes*	523,962,823	553,261,172	(29,298,349)	(5.30%)
Corporations	2,523,446,423	2,927,159,714	(403,713,291)	(13.79%)
Deeds	215,811,775	218,531,615	(2,719,840)	(1.24%)
Estate and Inheritance	699,555,302	601,305,956	98,249,346	16.34%
Income*	17,388,968,699	17,125,833,364	263,135,335	1.54%
Insurance	415,459,364	400,596,657	14,862,707	3.71%
Motor Fuels and I.F.T.A.†	707,877,049	775,462,667	(67,585,618)	(8.72%)
Public Utilities	(345,771)	40,000	(385,771)	(964.43%)
Room Occupancy ‡	252,268,286	283,707,813	(31,439,527)	(11.08%)
Sales and Use ‡	6,846,337,751	6,842,955,644	3,382,107	0.05%
Club Alcoholic Beverages	749,500	925,723	(176,223)	(19.04%)
Motor Vehicle Excise	194,705	77,273	117,432	151.97%
Convention Center Surcharges	16,681,990	17,001,282	(319,292)	(1.88%)
Community Preservation Trust	42,133,787	23,173,800	18,959,987	81.82%
Controlled Substances and Marijuana Excise	51,684,669	13,948,855	37,735,814	270.53%
Satellite	7,633,593	8,605,108	(971,515)	(11.29%)
Statewide Car Rental	6,174,160	1,096,128	5,078,032	463.27%
Subtotal (Department of Revenue)	$29,795,525,953	$29,899,344,987	$(103,819,034)	(0.35%)
Massachusetts Gaming Commission:
Pari-Mutuel Taxes	740,900	788,306	(47,406)	(6.01%)
Gaming Revenue Taxes	187,870,030	130,701,550	57,168,480	43.74%
Lottery Commission:
Beano	480,623	697,460	(216,837)	(31.09%)
Raffles and Bazaars	857,327	1,123,098	(265,771)	(23.66%)
State Athletic Commission:
Boxing Contests	149,890	125,966	23,924	18.99%
Boxer’s Fund	22,563	12,643	9,920	78.46%
Division of Insurance:
Excess and Surplus Lines Insurance	54,660,063	44,848,231	9,811,832	21.88%
Secretary of State:
Deeds Excise Stamp Tax Fees	98,338,234	99,815,285	(1,477,051)	(1.48%)
Department of Unemployment Assistance:
Workforce Training Contribution	25,743,325	25,131,463	611,862	2.43%
Subtotal (Other Agencies)	$368,862,955	$303,244,002	$65,618,953	21.64%
Total (Department of Revenue and Other Agencies)	$30,164,388,908	$30,202,588,989	$(38,200,081)	(0.13%)

*     Includes income tax penalties assessed under Section 2 of Chapter 111M of the Massachusetts 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 taxes, as well as service fees for the City of Worcester Digital Federal Credit Union Arena and Convention Center Capital Improvement Fund.

Exhibit VII

History of Net State Tax Versus Allowable State Tax Revenue

Date published:	October 15, 2020