Taxes Running $1 Billion Over Benchmark

Tax revenues in February Were $1.98 billion

Through the first eight months of fiscal 2023, tax collections of $23.6 billion are running 0.2 percent behind the record fiscal 2022 haul but are outpacing the state’s benchmarks by about $1 billion, or 4.4 percent.

Tax revenues in February of $1.98 billion exceeded benchmark levels, continuing the trend that has held for much of this fiscal year. Collections last month were up 9 percent above February 2022, and 2.5 percent over benchmark, the Department of Revenue reported late Friday.

After adjusting for an elective pass-through entity excise tax, year-to-date collections are $1.058 billion or 4.7 percent more than collections in the same period of fiscal 2022 and $572 million or 2.5 percent higher than the year-to-date benchmark.

Fiscal 2022 tax collections soared over the previous fiscal year, triggering nearly $3 billion in tax returns and leaving Beacon Hill with a substantially expanded tax revenue base from which to begin fiscal 2024 budget deliberations.

Income withholding taxes of $10.9 billion are up 3.6 percent so far this fiscal year and sales and use taxes of $6.3 billion, another big revenue base for the state budget, are up 8.8 percent compared to the same eight-month period in fiscal 2022. Corporate and business taxes of $2.16 billion are up 0.5 percent, and non-withheld income tax collections of $2.34 billion are down just over 27 percent so far this fiscal year.

“February collections increased in withholding, sales and use tax, and ‘all other tax’ in comparison to February 2022,” Commissioner Geoffrey Snyder said in a statement. “These increases were partially offset by decreases in non-withholding income tax. The increase in withholding is likely related to labor market conditions and the increase in sales and use tax reflects, in part, continued strength in retail sales. The increase in ‘all other tax’ is primarily attributable to estate tax, a tax category that tends to fluctuate.”