Massachusetts Tax Revenue Forecasts
March 18, 2015
The Beacon Hill Institute (BHI) predicts that Massachusetts tax revenues will be $24 billion in FY 2015, 4.9 percent over FY 2014, and $25,801 billion in FY 2016, 5.3% over FY 2015. Both of these increases are largely driven by a stronger recovery in the growth of state personal income.
BHI revenue forecasts assume there will be no additional major change in Massachusetts tax policy for the forecast period, which runs through June 2016.
For the first six months of FY 2015 (July 2014 through December 2014), tax revenues grew by 4.1 percent over the first six months of FY 2014, led by
- A 26.3 percent increase in business excise taxes;
- An 11.3 percent increase in other tax revenues (estate, room occupancy and deeds);
- A 4.9 percent increase in personal income tax revenue;
- And a 4.7 percent increase in sales tax revenues.
BHI sees this trend continuing for the rest of the fiscal with sales tax revenues increasing by 5.2 percent and personal income tax revenues by 6.3 percent. Corporate income tax revenues will decrease by 4.1 percent and business excise taxes revenues slowing to an increase of 6.8 percent. For FY 2015, they expect total tax revenues to increase by 4.9 percent over FY 2014.
For FY 2016, forecasts show a 5.3 percent increase in tax revenues over FY 2015.
- Personal income tax revenues will increase by 7.2 percent.
- Sales tax revenues will increase by 3.3 percent.
- Corporate income tax revenues will rise by 8.6 percent.
- Business excise tax revenues will increase by 12.3 percent
- Other tax revenues will fall by 11.3 percent.
- Alcohol taxes will rise by 2.0 percent.
- Motor fuels taxes will rise 2.3 percent.
- Cigarette taxes will fall 0.9 percent.
Source: "Massachusetts Tax Revenue Forecasts for FY 2015 and FY 2016," The Beacon Hill Institute at Suffolk University, January 22, 2015.
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