Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder last week announced that August revenue collections totaled $1.992 billion, $6 million or 0.3% more than the actual collections in August 2019.
Of the $1.992 billion August collections, approximately $13 million is income tax payments and refunds that will be recorded as FY2020 revenue, pursuant to section 3 of chapter 78 of the Acts of 2020. Such amounts consist of payments and refunds originally due in FY2020 but received in FY2021, including payments made with final 2019 income tax returns, extension payments and estimated payments originally due in April and June 2020. Therefore, approximately $1.979 billion in August revenue will be recorded in FY2021, which is $7 million or 0.4% less than the collections in August 2019.
For the fiscal year-to-date through August, revenue collections totaled $6.448 billion, $2.437 billion or 60.7% more than the same fiscal year-to-date period in 2019. Of the $6.448 billion year-to-date collections through August, approximately $2.313 billion, or 36%, is income tax payments and refunds that will be recorded as FY2020 revenue pursuant to legislation. Excluding these income tax amounts that will be recorded as FY2020 revenue, August year-to-date collections total approximately $4.135 billion, which is $124 million or 3.1% more than collections in the same period of FY2020.
“Revenues for the month of August were mainly driven by withholding, part of which is attributed to withholding on unemployment insurance benefits, as well as the regular sales tax. These increases were offset by decreases in non-withheld income tax, meals tax, corporate and business taxes, and ‘All Other’ tax,” said Commissioner Snyder. “August year-to-date total collections were also impacted by corporate and business tax payments attributable to returns due in April, following the waiver of late filing and payment penalties until July 15 for such returns. DOR will continue to monitor revenue collections closely.”
August is one of the smaller months for revenue collection, because neither individual nor business taxpayers make significant estimated payments during the month. On average for the past several years, roughly 6.7% of annual revenue has been received during August.
However, this August is different from previous years because of the impact of COVID-19 on tax bases and because revenues collected in this month include deferred payments on personal income tax and corporate excise payments, but exclude some regular sales, meals and room occupancy taxes which are postponed to September. As noted above, deferred personal income tax payments and refunds will be booked back to FY2020 by the Comptroller.
Preliminary August Revenue Collections
•Income tax collections for August were $1.151 billion, $61 million or 5.6% more than August 2019. Of the $1.151 billion August income tax collections, about $13 million was income tax payments and refunds originally due in FY2020 but received in August 2020, including payments made with final income tax returns, extension payments and estimated payments originally due in FY2020.
•Withholding tax collections for August totaled $1.119 billion, $83 million more than August 2019.
•Income tax estimated payments totaled $33 million for August, $4 million less than August 2019.
•Income tax returns and bills totaled $46 million for August, $9 million more than August 2019.
•Income tax cash refunds in August totaled $46 million in outflows, $26 million more than August 2019.
•Sales and use tax collections for August totaled $608 million, $3 million more than August 2019.
•Corporate and business tax collections for August totaled $31 million, $27 million less than August 2019. •Other tax collections for August totaled $202 million, $32 million less than August 2019