Collections Up for Almost Every Tax Category
The final accounting of fiscal year 2023 is not yet done, but the Department of Revenue started fiscal year 2024 off in July by collecting $2.67 billion in tax revenue, $264 million or 11 percent more than was collected in July 2022.
Collections were up for almost every tax category, but DOR said it thinks that about $150 million of the year-over-year increase “reflects a shift in sales and use and withholding collections between months because of timing.” Without that shift, DOR estimated that July 2023 collections would have been about $114 million or 4.7 percent more than actual collections of July 2022.
“July revenue included increases relative to July 2022 collections in withholding, non-withheld income tax, sales and use tax, corporate and business tax, and ‘all other’ tax,” Revenue Commissioner Geoffrey Snyder said. “The increase in sales and use tax was the result of typical periodic fluctuations in collections. The increase in withholding reflects current labor market conditions as well as periodic fluctuations. The increase in ‘all other’ tax is due, in part, to estate tax, a category that tends to fluctuate.”
July is one of the smaller tax collection months and usually brings in about 6.7 percent of the state’s annual tax revenue, DOR said. The month’s tax receipts are not compared to benchmarks because DOR has not yet established its monthly revenue expectations for the fiscal year that began July 1.
DOR also has not yet finished processing June 2023 revenues, which will round out the picture for fiscal year 2023. The requirement that DOR report monthly tax revenue on the third business day of the following month does not apply to June and the agency has until “the day after the department completes the processing of June tax revenues” to report on June collections.
After adjusting for the net impact of a pass-through entity excise, DOR said in early June that fiscal 2023 tax collections were running $583 million behind benchmarks used to craft the fiscal 2023 state budget. The fiscal year 2024 budget that Gov. Maura Healey is now reviewing represents a 6.6 percent, or $3.5 billion, spending increase from the $52.7 billion annual budget signed for fiscal year 2023.