- Massachusetts Department of Revenue
April 21, 2009
Honorable Chairmen and Ranking Minority Members of the Ways and Means Committees:
Pursuant to Chapter 196 of the Acts of 2008, the Department of Revenue hereby submits its midmonth tax collection report for April 2009. The attached table shows April 2009 month-to-date and FY2009 year-to-date tax revenue collections through April 15, 2009, along with the dollar and percentage changes from the same collection period in April 2008. Also shown are the percentage growth amounts for the full month of April 2009 and for FY2009 year-to-date through the end of April 2009 that were assumed in the benchmarks corresponding to the April 15, 2009 revised Executive Office for Administration and Finance FY2009 tax revenue estimate of $19.333 billion. Please note that the $19.333 billion estimate and the April 2009 month-to-date and year-to-date budgetary fund collection totals do not include increased cigarette tax collections resulting from the July 2008 increase in the cigarette tax, which are dedicated to the Commonwealth Care Trust Fund, a non-budgetary fund. However, the increase in cigarette tax collections resulting from the higher cigarette tax is shown in a separate line at the bottom of the table.
Through April 15, 2009, April 2009 month-to-date tax collections totaled $513 million, down $124 million from the same period in April 2008, with the full month April benchmark (based on the $19.333 billion estimate) projecting total tax revenues of $2.237 billion, a decrease of $496 million from April 2008. The month-to-date decline through April 15th was primarily the result of lower income tax estimated payments, higher income tax refunds, and higher corporate and business tax refunds compared to April 2008. Because about three-quarters of April tax revenue is typically received in the second half of the month, month-to-date revenue receipts through April 15th are not a reliable indicator of full month collections.
Month-to-date withholding taxes through April 15, 2009 totaled $333 million, down $4 million from the same period in April 2008, compared to the revised benchmark estimate that projects withholding growth of $7 million for the full month.
Month-to-date income tax cash refunds through April 15, 2009 totaled $205 million, up $50 million from the same period last April, with the full month benchmark calling for growth of $14 million. About $11 million of the month-to-date increase is due to faster processing of refunds.
Month-to-date income tax payments with returns and extensions through April 15, 2009 totaled $249 million, up $25 million from the same period in April 2008, compared with the benchmark estimate that projects a decline of $389 million for the full month. As of April 15th, a small proportion of payments with returns and extensions had been received, so collections as of that date are not a good indicator of payments for the month as a whole.
Through April 15, 2009, income tax estimated payments totaled $46 million, down $47 million from the same period in April 2008, with the full month benchmark projecting a decline of $90 million. About two-thirds to three-quarters of income tax estimated payments are received in the second half of the month.
April is a small month for corporate and business tax payments. Through April 15, 2009, month-to-date corporate and business tax collections totaled $11 million, down $35 million from the same period in April 2008, compared to a $4 million decline assumed in the monthly benchmark. Part of the month-to-date decline is due to a $19 million increase in refunds claimed by insurance companies.
April 15th was too early in the month for sales tax trends to be meaningful, as monthly sales tax payments (other than those for motor vehicle sales tax) are not due until April 20th. The full month benchmark assumes a decline of $10 million in sales tax collections from April 2008. In addition, monthly motor fuels and rooms tax payments are due on the 20th of each month. Therefore, month-to-date growth comparisons for those tax types before the third week of the month are not necessarily indicative of final collections for the full month.
Finally, there may be other differences in the due dates for certain tax payments from one fiscal year to the next (e.g., in withholding payments or the timing of refund cycles) which complicate month-to-date comparisons to the prior year.
As a result of the factors noted above, revenues received through April 15th as reported in the attached table may not be indicative of what the final results for the full month will be. Specifically, they do not necessarily represent one-half of the revenues to be received in the full month and the month-to-date growth rates compared to April 2008 could change significantly by the end of this month. Any variances from the monthly benchmark at this point in the month should not be relied on as an indicator of what total final revenues for the month will be, compared to the full month benchmarks.
If you have any questions concerning this report, please contact either me (at 626-2201) or Howard Merkowitz, Director of the Office of Tax Policy Analysis (at 626-2100).
Navjeet K. Bal
cc: Leslie A. Kirwan, Secretary of Administration and Finance
Representative Robert A. DeLeo, House Speaker
Senator Therese Murray, Senate President
Representative Jay R. Kaufman, House Chair, Joint Committee on Revenue
Senator Benjamin B. Downing, Senate Chair, Joint Committee on Revenue
Representative Bradley H. Jones, Jr., House Minority Leader
Senator Richard R. Tisei, Senate Minority Leader
Mid-Month Tax Collection Report for April 2009 (in $ Millions) Collections as of April 15, 2009, Compared to Same Collection Period in April 2008 and and Revised Benchmark Base on April 15, 2009 A&F Estimate of $19.333 Billion