Through the first eight months of fiscal year 2023, tax collections of $23.6 billion are running 0.2 percent behind the record fiscal year 2022 haul but are outpacing the state’s benchmarks by about $1 billion, or 4.4 percent.
Tax revenues in February 2023 of $1.98 billion exceeded benchmark levels, continuing the trend that has held for much of this fiscal year. Collections last month were up 9 percent above February 2022, and 2.5 percent over benchmark, the Massachusetts Department of Revenue reported late Friday, March 3.
After adjusting for an elective pass-through entity excise tax, year-to-date collections are $1.058 billion (or 4.7 percent) more than collections in the same period of fiscal year 2022 and $572 million (or 2.5 percent) higher than than the year-to-date benchmark.
Fiscal year 2022 tax collections soared over the previous fiscal year, triggering nearly $3 billion in tax returns and leaving Beacon Hill with a substantially expanded tax revenue base from which to begin fiscal year 2024 budget deliberations. (Fiscal year 2024 begins July 1, 2023.)
Income withholding taxes of $10.9 billion are up 3.6 percent so far this fiscal year; and sales and use taxes of $6.3 billion, another big revenue base for the state budget, are up 8.8 percent compared to the same eight-month period in fiscal year 2022. Corporate and business taxes of $2.16 billion are up 0.5 percent, and non-withheld income tax collections of $2.34 billion are down just more than 27 percent so far this fiscal year.
“February collections increased in withholding, sales, and use tax, and ‘all other tax’ in comparison to February 2022,” commissioner Geoffrey Snyder said in a written statement. “These increases were partially offset by decreases in non-withholding income tax. The increase in withholding is likely related to labor market conditions and the increase in sales and use tax reflects, in part, continued strength in retail sales. The increase in ‘all other tax’ is primarily attributable to estate tax, a tax category that tends to fluctuate.”
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Taxes illustration (via Flicker | CC-BY-SA 2.0) 
