Mass. Collects More Taxes Than Expected To Start 2025, Driven By Capital Gains And Millionaires' Tax

“Mass. collects more taxes than expected to start 2025, driven by capital gains and millionaires’ tax”

March tax collections beat expectations by $101 million or 2.5%, and state tax revenues by means of three-quarters of the price range 12 months are operating $786 million forward of benchmark, primarily pushed by surtax and capital positive aspects tax collections.

The Division of Income stated Thursday the $4.193 billion collected final month was $127 million or 3.1% greater than whole collections in March 2024 and put the state’s year-to-date tax take for fiscal 2025 at $29.681 billion. That’s $2.149 billion or 7.8% greater than precise collections throughout the identical nine-month interval of fiscal 2024, and $786 million or 2.7% above the year-to-date benchmark.

DOR stated a “significant portion” of the year-to-date above benchmark efficiency is probably going pushed by surtax and capital positive aspects tax collections. Surtax income is meant to be spent just for transportation or schooling functions and capital positive aspects tax income flows into state financial savings after hitting a sure threshold.

Income Commissioner Geoffrey Snyder stated March, which is a middle-of-the-road month for its income influence, noticed will increase in comparison with March 2024 collections in “all major tax categories.”

The $43 million or 2.2% improve in withholding “reflects current labor market conditions” whereas the $22 million or 48.3% improve in non-withholding earnings tax is due, partially, to “passthrough entity excise payments and a likely increase in capital gains tax collections, partially offset by an unfavorable increase in refunds,” Snyder stated. The commissioner stated nearly flat gross sales and use tax collections “probably reflect the impact of declining consumer confidence and the lingering impact of past inflation.”

The $30 million or 2.4% improve in company and enterprise taxes “is driven by an increase in payments with returns and bills and a favorable decrease in refunds, partially offset by a decrease in estimated payments,” Snyder stated. He attributed the $27 million or 15.4% improve within the ‘all different’ tax largely to “an increase in the premium tax on excess and surplus lines insurance policies, a category that tends to fluctuate.”

April is probably the most important month for state tax collections and the month’s outcomes can have a significant affect on the state price range. Not solely is it the month that usually contributes the best share of tax income, nevertheless it comes because the fiscal 12 months wraps up and price range administration selections are extra restricted.

The Healey administration has set April’s month-to-month benchmark at $5.722 billion, which might be $605 million lower than what was collected in April 2024. DOR is because of report April revenues by Monday, Could 5.