DOR’s June Revenue Collections Interim Report Shows Drop

Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder today announced in an interim report that June revenue collections total $2.493 billion as of July 24, 2020, which is $761 million or 23.4 percent less than benchmark, and $691 million or 21.7 percent less than the actual collections in June 2019. Fiscal Year 2020 (FY2020) revenue is still being collected and will be revised.

These figures are preliminary and FY2020 revenue is still being collected due to section 12 of chapter 53 of the Acts of 2020, which extended the April 15 personal income tax filing and payment deadline to July 15. In addition, DOR invoked its administrative authority to move the April and June quarterly estimated income tax payment deadlines to July 15. Section 3 of chapter 78 of the Acts of 2020, requires the Comptroller to record as FY2020 revenue income tax payments originally due in FY2020 but received between July 1 and Aug. 31, 2020. Such payments include those made with final income tax returns, extension payments and estimated payments originally due in FY2020. 

[1] The original consensus tax revenue estimate benchmark for fiscal year 2020 is $30.099 billion, excluding tax-related settlements exceeding $10 million each. On January 13, 2020, the Secretary of Administration and Finance certified a revised fiscal 2020 tax revenue estimate of $30.289 billion, including an estimated $132.5 million from marijuana sales and excise taxes. The revision is reflected beginning with the January report.

Because DOR will be receiving revenue in July and August that will be treated as FY2020 revenue, DOR will be unable to complete the full processing of FY2020 tax revenues until after Aug. 31. Therefore, DOR anticipates submitting the final FY2020 revenue report after that date.

DOR is not required by statute to publish revenue collections for June on the third business day following the end of the month, as is required for all other months. DOR historically releases preliminary revenue collection figures for June at the end of July.

For the fiscal year-to-date through today’s interim report, partial revenue collections totaled $27.276 billion, $2.417 billion or 8.1 percent less than the same fiscal year-to-date period in 2019, and $3.014 billion or 9.9 percent less than the year-to-date benchmark. This figure is expected to be updated.

“Approximately 81 percent of the year-to-date shortfall is in non-withheld income tax, which is due in large part to the deferral of the deadlines for personal income tax returns and payments and the first two estimated payment installments to July 15, 2020,” said Commissioner Snyder. “DOR will be releasing a full FY2020 revenue report in September because recently enacted legislation requires the Comptroller to record income tax payments received between July 1 and August 31 as FY20 revenue. We will continue to closely monitor these delayed FY20 revenue collections.”

Historically, June is a significant month for revenues, because both individual and business taxpayers make estimated payments during the month.  In most years, the month of June has ranked #2 (behind only April) in the proportion of annual revenue received during the month.

As was the case with the prior two months (April and May), tax collections in June 2020 have so far differed from historical June collections due to measures enacted to mitigate the impact and breadth of COVID-19, including, without limitation, the extension of the income tax filing and payment deadline to July 15, 2020, the extension of the first and second estimated payment installments for 2020 to July 15, 2020, penalty waivers, safer-at-home advisories and gradual reopening of Massachusetts, as well as the impact COVID-19 has had on consumer and corporate behavior, the economy and the stock market.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.