April 15 is still tax day in Massachusetts at the state level — at least for now.
The federal government pushed back the income tax filing deadline to July 15, but Massachusetts Governor Charlie Baker has not done the same.
This puts Massachusetts in the minority. According to The Tax Foundation, 34 of the 43 states that have a state income tax have pushed back their tax filing deadlines. Of those 34, nearly all of them pushed their filing deadline back to July 15 to match the federal government.
In Massachusetts, state officials are concerned about a bookkeeping matter that could lead to a serious shortfall.
The state’s current fiscal year ends June 30, so any revenue collected in July would count toward the new fiscal year that starts on July 1 (which is known as fiscal year 2021). State officials say moving the date back would result in a significant revenue shortage in fiscal year 2020 for the state government: about $2 billion in personal income taxes and $3.5 billion in corporate income taxes, according to State House News Service.
The state constitution requires that the state must balance its budget every year. The state’s “Rainy Day Fund” only has $3.4 billion, according to the Massachusetts Municipal Association — less than the estimated aforementioned $5.5 billion the state stands to lose by not collecting income taxes before June 30.
On Wednesday, The Boston Globe editorial board offered a compromise. The newspaper recommended delaying the tax filing deadline until June 30. That way, people would have two-and-a-half months of additional time to file their taxes without causing a massive budget shortfall.
Yet that has not happened, and both the Massachusetts Fiscal Alliance and the Pioneer Institute have both voiced opposition to the state’s inaction.
A public statement put out by the Pioneer Institute on Wednesday, March 25 argued that the state should move the filing date from April 15 to July 15.
It said that the budget shortfall would be a problem, but not to the same magnitude of not providing Bay Staters with tax relief with so many out of work.
“Taxpayers already hit with declining paychecks and retirement accounts should not bear the additional interest and penalties stemming from an inability to meet the April 15 deadline, especially when their inability to make those filings in a timely way is largely due to compliance with Coronavirus containment strategies promoted by health officials and governments at all levels,” the Pioneer Institute said.
“Additionally, given the current economic crisis, money that would be going to the state could instead be used for life’s necessities and work to keep the local economy afloat during the extension period until payments are due in July,” the Pioneer Institute statement continued.
Massachusetts Fiscal Alliance spokesman Paul Craney argued that the state is being hypocritical at a time, especially when many elderly Americans don’t file their taxes online.
“The Governor and State House leaders are telling the public to stay in their homes, with the one exception — to get their taxes done,” Craney said in a statement on Thursday, March 26. “For a lot of people, especially older people, this is a process that involves multiple visits to an accountant’s office to exchange documents and sign returns.”
“Given that they’ve ordered the shutdown of thousands of businesses they’ve deemed ‘non-essential’ this week, the continued demand that people leave their homes is pretty tone-deaf,” he added. “This really is not a good look for our state’s leaders, especially since a majority of states have already mirrored the Trump administration’s gracious extension.”
The Massachusetts state income tax is 5.0 percent for an individual and its corporate state income tax rate is 8.0 percent.
