- Massachusetts Department of Revenue
May 20, 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 May 2009. The attached table shows May 2009 month-to-date and FY2009 year-to-date tax revenue collections through May 15, 2009, along with the dollar and percentage changes from the same collection period in May 2008. Also shown are the percentage growth amounts for the full month of May 2009 and for FY2009 year-to-date through the end of May 2009 that were assumed in the benchmarks corresponding to the May 4, 2009 revised Executive Office for Administration and Finance FY2009 tax revenue estimate of $18.436 billion. Please note that the $18.436 billion estimate and the May 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 rate, 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 rate is shown in a separate line at the bottom of the table.
Through May 15, 2009, tax collections totaled $608 million, down $148 million from the same period in May 2008, with the full month May benchmark (based on the $18.436 billion estimate) projecting total tax revenues of $1.204 billion, a decrease of $289 million from May 2008. The month-to-date decline through May 15th was primarily the result of lower income tax payments with returns as compared to May 2008.
Month-to-date withholding taxes through May 15, 2009 totaled $392 million, up $23 million from the same period in May 2008, compared to the revised benchmark estimate that projects a withholding decline of $29 million for the full month. Some of the month-to-date withholding growth through May 15th might have been due to timing factors that will be reversed over the remainder of the month.
Month-to-date income tax payments with returns and extensions through May 15, 2009 totaled $145 million, down $158 million from the same period in May 2008, compared with the benchmark estimate that projects a decline of $190 million for the full month. As of May 15th, income tax payments with returns and extensions were $1 million above the monthly benchmark. Virtually all tax year 2008 income tax payments with returns and extensions have now been deposited, though a small number of additional payments will be received and processed over the remainder of May.
Month-to-date income tax cash refunds through May 15, 2009 totaled $46 million, down $15 million from the same period last May, with the full month benchmark calling for growth of $6 million.
May is a small month for corporate and business tax payments. Through May 15, 2009, month-to-date corporate and business tax collections totaled $17 million, down $1 million from the same period in May 2008, compared to a $10 million decline assumed in the full month benchmark.
May 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 May 20th. The full month benchmark assumes a decline of $29 million in sales tax collections from May 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 May 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 May 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 May 2009 (in $ Millions) Collections as of May 15, 2009, Compared to Same Collection Period in May 2008 and and Revised Benchmark Base on April, 2009 A&F Estimate