It’s official: Massachusetts’ taxpayers won’t be getting a break this year from a decades-old tax rebate law, the state’s fiscal watchdog says.
State Auditor Diana DiZoglio said a review by her office has determined that the net state tax revenues of more than $39 billion in fiscal 2023 were below the allowable amount of $44.4 billion, “resulting in no excess state tax revenues.”
The auditor’s report is based on data from the state Department of Revenue, which also concluded that taxpayers won’t be getting any extra refunds this year.
In 2022, the state returned $3 billion to more than 3.6 million taxpayers under the voter-approved Chapter 62F law, which requires Massachusetts to refund money when tax revenues grow by more than wages and salaries.
But lawmakers approved changes to the law as part of a $1 billion tax relief package, signed by Gov. Maura Healey in October, that exempted collections from the new “millionaires tax” – which sets a 4% surtax on incomes above $1 million – from the calculation.
In the previous year, the state collected nearly $2.2 billion from the tax, according to the report.
Last year, DiZoglio’s office determined that the net state tax revenues of nearly $37 billion in fiscal 2023 were below the allowable amount of $41.4 billion, which was also below the threshold to trigger the rebate law.
The Chapter 62F law was overwhelmingly approved by voters in 1986. Besides 2022, the rebate law had only been triggered once since it was approved – in fiscal 1987 – when the state’s actual revenues exceeded allowable revenues by nearly $30 million.
As part of the tax relief plan, lawmakers also tweaked the Chapter 62F law to require that any future rebates be paid out “equally” among taxpayers, and married taxpayers who file a joint return with the federal government must also file a joint state return.
That change was prompted by concerns raised by liberal groups that “loopholes” in state law would allow wealthy households to skirt the “millionaires tax”.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.