Massachusetts DOR Reports on July 2020 Revenue Collections

July Revenue Collections Total $4.456 Billion

Included in the July total is $2.293B of preliminary F20 deferred income tax

8/05/2020

(BOSTON, MA) — Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder today announced that July revenue collections totaled $4.456 billion, $2.43 billion or 120% more than the actual collections in July 2019.

Of the $4.456 billion July collections, approximately $2.293 billion is income tax payments and refunds that will be recorded as FY2020 revenue, pursuant to section 3 of chapter 78 of the Acts of 2020.¹ Such amounts consist of payments and refunds originally due in FY2020 but received in July 2020, including payments made with final 2019 income tax returns, extension payments and estimated payments originally due in April and June 2020. Therefore, approximately $2.163 billion in July revenue will be recorded in FY21, which is $138 million or 6.8% more than collections in July 2019.

Also collected in this July was an estimated $50 million in corporate and business taxes deferred from the spring following the waiver of penalties for late filing and payment. This revenue counts as FY21 revenue, but has no equivalent in July of 2019. Adjusted for both types of deferred taxes, July 2020 revenue is approximately $88 million, or 4.3%, greater than equivalent tax collections last July.

“Approximately 51% of July total collections will be recorded as FY2020 revenue due to legislation requiring certain revenue to be recorded in FY20,” said Commissioner Snyder. “July total collections were also boosted by corporate and business tax payments attributable to returns due in April, which will be recorded as FY21 revenue, following the waiver of late filing and payment penalties in connection with such returns. Sales and use tax revenue also increased as compared to the same period in 2019, despite the deferral of certain regular sales, meals, and room tax payments from FY2020 to FY2021, which are due in September. DOR will closely monitor revenue collections.”

July is historically one of the smaller months for revenue collection, because neither individual nor business taxpayers make significant estimated payments during the month. As a result, roughly 6.7% of annual revenue has been received on average during July.

However, this July is different from previous years. Revenues collected in this month reflect a material amount of the deferred payments and refunds on personal income tax and corporate excise payments, but also exclude some regular sales, meals and room occupancy tax collections which are postponed to September. As noted above, deferred personal income tax payments and refunds will be recorded as FY2020 revenue by the Comptroller. For a summary of these and other selected Commonwealth measures, please see the Special Disclosure Regarding COVID-19 Related Matters in the Commonwealth of Massachusetts Information Statement dated May 22, 2020 (as supplemented).²

Details:

Preliminary July Revenue Collections

• Income tax collections for July were $3.449 billion, $2.338 billion or 210.3% more than July 2019. Of the $3.449 billion July income tax collections, about $2.293 billion (or 66%) was income tax payments and refunds originally due in FY2020 but received in July 2020, including payments made with final income tax returns, extension payments and estimated payments originally due in FY2020.

• Withholding tax collections for July totaled $1.131 billion, $80 million more than July 2019.

• Income tax estimated payments totaled $411 million for July, $378 million more than July 2019.

• Income tax returns and bills totaled $2.032 billion for July, $1.990 billion more than July 2019.

• Income tax cash refunds in July totaled $125 million in outflows, $112 million more than July 2019.

• Sales and use tax collections for July totaled $614 million, $11 million more than July 2019.

• Corporate and business tax collections for July totaled $202 million, $95 million more than July 2019. DOR estimates that corporate and business tax filers paid about $50M in July attributable to returns due in April, following the waiver of late filing and payment penalties in connection with such returns.

• Other tax collections for July totaled $191 million, $14 million less than July 2019.

July 2020 Tax Collection Summary (in $ millions) Preliminary as of August 5, 2020