Massachusetts brings in $723 million more in taxes than projected

Tax collections appear strong enough to hold a sales tax holiday next month.

Navheet K. Bal

BOSTON - Tax collections for the recent fiscal year in Massachusetts were $723 million more than projected and nearly $2 billion more than the prior year, reflecting a "noticeably stronger" economy and most likely assuring a sales tax holiday next month, the state Department of Revenue and a top legislator announced Tuesday.

Revenue Commissioner Navjeet K. Bal said that the state collected $20.5 billion in taxes for the fiscal year that ended June 30, an increase of more than $1.9 billion or 10.6 percent from the prior year and $723 million more than projections.

"The increase of nearly $2 billion in collections reflects a Massachusetts economy that grew noticeably stronger over the past 12 months," Bal said in a prepared statement.

Senate President Therese Murray signaled on Monday that a sales tax holiday would be likely for next month.“Yes we did talk about that. I think there’s mostly a consensus that that’s what we might like to do,” Murray said of a sales tax holiday after a meeting with Gov. Deval L. Patrick and House Speaker Robert A. DeLeo.

As they have in past recent years, legislators are expected to approve a bill for a weekend in August to exempt the 6.25 percent sales tax from most purchases.

Collections for June totalled $2.142 billion, or $48 million more than projected and an increase of $106 million, or 5.2 percent from June of last year, the revenue department said.

The state secretary for administration and finance and top legislators establish a consensus each year on a projection for tax collections for the next fiscal year. Officials recently had projected $19.784 billion in revenue collections for the fiscal 2011 year ending June 30.

Personal income tax collections for the fiscal year were $11.576 billion, an increase of $1.466 billion, or 14.5 percent and $650 million more than expected.

Receipts from the sales tax totalled $4.905 billion, up $293 million, or 6.4 percent, meeting projections.

Estimated income tax payments, which include capital gains from the sale of stock and a tax on stock dividends, were $1.857 billion, up 25 percent, or $373 million, and $166 million more than projected.