Tax Collections Still Lagging Expectations Through October
October Tends to Be a Less Significant Month for Collections
State tax collections landed in a familiar spot in October, rising compared to the same period last year but still falling short of the projected haul, officials announced Tuesday.
The Department of Revenue collected $2.685 billion last month, which was $124 million or 4.9 percent more than in October 2023 and $86 million or 3.1 percent below the monthly benchmark amount.
Through the first four months of fiscal 2025, cumulative tax collections are running $129 million or 1 percent below year-to-date benchmarks and $667 million or 5.6 percent above actual collections during the same period in fiscal 2024.
DOR said a “temporary, one-time event in sales and use tax” boosted collections by about $54 million. Without that, the year-to-date total would be $183 million below benchmark, the department suggested.
October tends to be a less significant month for collections, representing roughly 6.5 percent of the state’s total tax revenue. DOR suggested that the month’s totals “should not be used as a predictor for the rest of the fiscal year.”
“October revenue included increases relative to October 2023 collections in withholding, non-withheld income tax, and corporate and business tax,” Revenue Commissioner Geoffrey Snyder said. “These increases were partially offset by a decrease in sales and use tax. The increase in withholding reflects a likely increase in surtax revenue and current labor market conditions. The increase in non-withholding income tax is also likely due, in part, to an increase in surtax revenue. The decrease in sales and use tax is mostly driven by decreases in regular sales tax and motor vehicle sales tax.”
Non-surtax revenues fell short of expectations in fiscal 2024, and Gov. Maura Healey and legislative Democrats have not yet agreed on a plan to close the shortfall.
