December State Revenue Collections Total $2.8 Billion

Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder announced that December revenue collections totaled $2.842 billion, which was $230 million or 8.8 percent more than the actual collections in December 2019.

FY2021 year-to-date collections totaled approximately $14.306 billion, which is $372 million or 2.7% more than collections in the same period of FY2020.

“December revenue included increases in corporate and business taxes, withholding, and regular sales tax, as well as decreases in meals tax and ‘all other’ tax,” said Snyder. “The increase in withholding reflects increases in unemployment insurance benefits and the increase in corporate and business taxes is partly attributable to one-time business restructuring events and timing factors such as changes to corporate estimated payment installment patterns. DOR will continue to monitor revenue collections closely in the coming months.”

In general, December is a significant month for revenues because many corporate and business taxpayers are required to make quarterly estimated payments. In addition, quarterly income estimated payments could also begin to come in (income estimated payments are due by Jan. 15). December generally produces about 9.5 percent of annual revenue, making December the fifth largest revenue month of the year.

Similar to prior months, collections in December reflected the impact of filing and payment due date extensions for regular sales, meals, and room occupancy taxes. The due date for these tax types has been extended several times this year for certain businesses. The most recent extension was announced on Sept. 15, 2020. With this extension, returns and payments of these taxes for certain small businesses originally due during the period beginning March 2020 through April 2021 will instead be due in May 2021.

Officials noted that December revenues continued to reflect the impact of COVID-19 on the tax base. Also noted was that DOR has finalized the monthly benchmarks for the January to June 2021 period based on the revised FY21 tax revenue estimate of $28.390 billion, not including $50 million in settlements and judgments estimated to be certified in FY21. The benchmarks will be posted on the DOR website.

Details:

Preliminary December Revenue Collections

•Income tax collections for December were $1.477 billion, $44 million or 3.1 percent more than December 2019.

•Withholding tax collections for December totaled $1.306 billion, $44 million more than December 2019.

•Income tax estimated payments totaled $138 million for December, $4 million less than December 2019.

•Income tax returns and bills totaled $41 million for December, $6 million more than December 2019.

•Income tax cash refunds in December totaled $8 million in outflows, $1 million more outflow than December 2019.

•Sales and use tax collections for December totaled $581 million, $9 million less than December 2019.

•Corporate and business tax collections, including corporate estimated payments, for December totaled $589 million, $201 million more than December 2019.

• “Other tax” collections for December totaled $195 million, $6 million less than December 2019.