State tax revenues came in below benchmark again last month, the Massachusetts Department of Revenue announced, leaving the state $170 million short of where it expected to be one quarter into fiscal year 2024.
Revenue department tax collectors raked in $4.187 billion last month, a drop of $12 million (or 0.3 percent) compared to actual collections in September 2022, and $150 million (or 3.5 percent) below the administration’s monthly benchmark. September generally produces about 10 percent of annual state tax revenue.
“September collections decreased in non-withheld income, sales and use tax, corporate and business tax, and ‘all other’ tax in comparison to September 2022,” revenue department commissioner Geoffrey Snyder said. “These decreases were partially offset by an increase in withholding income tax. The decrease in non-withheld income tax was driven by decreases in income estimated payments and income return payments. The decrease in sales and use tax was due, in part, to typical timing factors in collections. The decrease in corporate and business tax was primarily due to an increase in corporate refunds and a decrease in corporate return payments. The decrease in ‘all other’ tax is mostly attributable to decreases in deeds excise and estate tax, categories that tend to fluctuate.”
The state Department of Revenue said that a shift in sales and use collections between months because of timing led to a $36 million swing in year-over-year collections last month. Without that, September 2023 revenue would have been about $24 million more than actual collections in September 2022 rather than $12 million less, the agency said.
Through the first three months of fiscal year 2024, tax collections of $9.284 billion are running $78 million or 0.9 percent ahead of collections in the same period of fiscal year 2023, but $170 million or 1.8 percent behind the year-to-date benchmark.
Tax collections in fiscal year 2023 dropped significantly from fiscal year 2022, and the state missed the revenue benchmark it used to make spending decisions. The annual state budget signed by Governor Maura Healey this past summer drives up fiscal year 2024 spending that is supported by the monthly tax revenue collections.
The state Department of Revenue is due to report October collections by Friday, November 3, and the monthly benchmark has been set at $2.743 billion.
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