Press Release  June Revenue Collections Interim Report

(Boston, MA) — Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder today announced in an interim report that June revenue collections total $2.493 billion as of July 24, 2020, which is $761 million or 23.4% less than benchmark¹, and $691 million or 21.7% less than the actual collections in June 2019. Fiscal Year 2020 (FY2020) revenue is still being collected and will be revised.

These figures are preliminary and FY2020 revenue is still being collected due to section 12 of chapter 53 of the Acts of 20202, which extended the April 15 personal income tax filing and payment deadline to July 15. In addition, DOR invoked its administrative authority to move the April and June quarterly estimated income tax payment deadlines to July 15. Section 3 of chapter 78 of the Acts of 2020³ requires the Comptroller to record as FY2020 revenue income tax payments originally due in FY2020 but received between July 1 and August 31, 2020. Such payments include those made with final income tax returns, extension payments and estimated payments originally due in FY2020.

Because DOR will be receiving revenue in July and August that will be treated as FY2020 revenue, DOR will be unable to complete the full processing of FY2020 tax revenues until after August 31. Therefore, DOR anticipates submitting the final FY2020 revenue report after that date.

DOR is not required by statute to publish revenue collections for June on the third business day following the end of the month, as is required for all other months. DOR historically releases preliminary revenue collection figures for June at the end of July.

For the fiscal year-to-date through today’s interim report, partial revenue collections totaled $27.276 billion, $2.417 billion or 8.1% less than the same fiscal year-to-date period in 2019, and $3.014 billion or 9.9% less than the year-to-date benchmark. This figure is expected to be updated.

“Approximately 81% of the year-to-date shortfall is in non-withheld income tax, which is due in large part to the deferral of the deadlines for personal income tax returns and payments and the first two estimated payment installments to July 15, 2020,” said Commissioner Snyder. “DOR will be releasing a full FY2020 revenue report in September because recently enacted legislation requires the Comptroller to record income tax payments received between July 1 and August 31 as FY20 revenue. We will continue to closely monitor these delayed FY20 revenue collections.”

Historically, June is a significant month for revenues, because both individual and business taxpayers make estimated payments during the month. In most years, the month of June has ranked #2 (behind only April) in the proportion of annual revenue received during the month.

As was the case with the prior two months (April and May), tax collections in June 2020 have so far differed from historical June collections due to measures enacted to mitigate the impact and breadth of COVID-19, including, without limitation, the extension of the income tax filing and payment deadline to July 15, 2020, the extension of the first and second estimated payment installments for 2020 to July 15, 2020, penalty waivers, safer-at-home advisories and gradual reopening of Massachusetts, as well as the impact COVID-19 has had on consumer and corporate behavior, the economy and the stock market.

Details:

Preliminary June Revenue Collections

• Income tax collections for June are $1.295 billion, $484 million or 27.2% below benchmark, and $423 million or 24.6% less than June 2019.
• Withholding tax collections for June total $1.094 billion, $122 million or 10.1% below benchmark, and $54 million or 4.7% less than June 2019.
• Income tax estimated payments total $152 million for June, $385 million or 71.7% less than benchmark, and $390 million or 72.0% less than June 2019.
• Income tax returns and bills total $180 million for June, $116 million or 179.8% more than benchmark, and $115 million or 177.3% more than June 2019.
• Income cash refunds in June total $131 million in outflows, $93 million or 241.9% more than benchmark, and $94 million or 255.1% more than June 2019.
• Sales and use tax collections for June total $583 million, $85 million or 12.8% below benchmark, and $35 million or 5.7% less than June 2019.
• Corporate and business tax collections for June total $449 million, $101 million or 18.4% below benchmark, and $164 million or 26.8% less than June 2019.
• Other tax collections for June total $166 million, $91 million or 35.2% below benchmark, and $69 million or 29.4% less than June 2019.

Partial Fiscal Year 2020 Revenue Collections

• Income tax collections of $15.028 billion are $2.458 billion or 14.1% below benchmark, and $2.072 billion or 12.1% less than Fiscal Year 2019.
• Withholding collections total $13.736 billion, $4 million below benchmark, but $528 million or 4.0% more than Fiscal Year 2019.
• Income tax payments with returns and bills total $1.003 billion, $1.848 billion or 64.8% below benchmark and $2.084 billion or 67.5% less than Fiscal Year 2019.
• Estimated payments of $1.905 billion are $672 million or 26.1% below benchmark and $563 million or 22.8% less than Fiscal Year 2019.
• Income tax refunds (outflows) are $1.616 billion, $66 million or 3.9% below benchmark, and $47 million or 2.9% less than Fiscal Year 2019.
• Sales and use tax collections of $6.810 billion are $436 million or 6.0% below benchmark but $11 million or 0.2% more than Fiscal Year 2019.
• Breaking down sales and use tax collections for fiscal year 2020: Regular Sales collections are $4.904 billion, $131 million or 2.6% below benchmark. Meals collections are $1.077 billion, $204 million or 15.9% below benchmark. Motor vehicles collections are $828 million, $100 million or 10.8% below benchmark.
• Corporate and business tax collections total $2.924 billion, $46 million or 1.6% below benchmark, and $385 million or 11.6% less than Fiscal Year 2019.
• Other taxes are $2.515 billion, $74 million or 2.9% below benchmark but $28 million or 1.1% more than Fiscal Year 2019.

June 2020 / FY20 Tax Collections Summary (in $ millions) Preliminary as of July 24, 2020

¹ The original consensus tax revenue estimate benchmark for fiscal year 2020 is $30.099 billion, excluding tax-related settlements exceeding $10 million each. On January 13, 2020, the Secretary of Administration and Finance certified a revised fiscal 2020 tax revenue estimate of $30.289 billion, including an estimated $132.5 million from marijuana sales and excise taxes. The revision is reflected beginning with the January report.
² https://malegislature.gov/Laws/SessionLaws/Acts/2020/Chapter53
³ https://malegislature.gov/Laws/SessionLaws/Acts/2020/Chapter78

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