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SD 3867

Department of Revenue February 2026 Monthly Report

194th Legislature (2025-2026)

DOR projects FY26 net state tax revenue will remain below the Chapter 62F cap by about $6.52 billion, with 4% surtax revenues excluded from the cap.

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Bill Summary · SD 3867

Summary of SD 3867 (Session 194th) – Massachusetts: Department of Revenue February 2026 Monthly Report

Note: This bill appears to pertain to the Department of Revenue’s February 2026 Monthly 62F Report, which analyzes year-to-date net state tax revenue, projections for the remainder of FY26, and whether net state tax revenue may exceed the allowable revenue under Chapter 62F. The summary below follows the bill’s content as provided.

1. Purpose and Intent

  • To require or formalize the Department of Revenue (DOR) reporting on:
    • Year-to-date net state tax revenue for the current fiscal year (FY26),
    • Projections of net state tax revenue for the remainder of FY26,
    • Projections of if and when net state tax revenue may exceed allowable state tax revenue under Chapter 62F.
  • The February 2026 Monthly 62F Report is presented as the basis for these determinations.

2. Key Provisions and Changes

  • DOR provides:
    • Year-to-date net state tax revenue excluding the 4% income surtax (as of Feb 28, 2026).
    • Estimate of total net state tax revenue for FY26 (excluding 4% surtax).
    • Estimate of allowable state tax revenue for FY26 (per Chapter 62F with growth factor).
    • Estimate of the amount by which net state tax revenue will be above or below allowable state tax revenue for FY26.
  • Specific figures (February 2026 report highlights):
    • Year-to-date net state tax revenue (excluding 4% surtax) as of 2/28/2026: $25,613,953,703.
    • DOR’s full-year net state tax revenue estimate for FY26 (excluding 4% surtax): $41,750,387,082.
    • DOR’s allowable state tax revenue for FY26: $48,266,193,259.
    • Estimated difference: net state tax revenue is projected to be below allowable by $6,515,806,177 for FY26.
  • 4% income surtax treatment:
    • The 4% income surtax revenue is explicitly excluded from the allowable state tax revenue limitation under Chapter 62F (i.e., surtax revenues are not counted toward the cap).
    • DOR’s surtax revenue estimate used for certifications (as of 2Q period): $1,302,704,923 (subject to revision).
  • Exhibits detail:
    • Exhibit 1: Year-to-date by tax category (e.g., Income, Sales and Use, Corporate, Deeds, Estate, etc.).
    • Exhibit 2: Estimate of the allowable state tax growth factor for FY26 (calculated at 1.0405620 based on calendar-year wage data and projections).
    • Exhibit 3: Specifics of allowable state tax revenues for FY26.
    • Exhibit 4: Projected monthly tail for remainder of FY26 (Mar–Jun 2026) and the cumulative year-to-date totals, including post-62F projections for each major revenue source.
  • Procedural references:
    • Subsection (d) of section 2BBBBBB of section 17 of Chapter 29: 4% income surtax not subject to 62F limitations.
    • Section 20 of Chapter 28 of the 2023 Acts: DOR certifies 4% surtax revenues to the State Comptroller by quarterly periods.
    • The State Auditor independently determines yearly whether net state tax revenues exceeded allowable revenues (annually by the third Tuesday of September).

3. Who/What Is Affected

  • Fiscal and budgetary stakeholders:
    • Massachusetts Department of Revenue (DOR) personnel and leadership.
    • Massachusetts State Comptroller and the Executive Office for Administration and Finance (A&F).
    • Joint Committee on Revenue; House and Senate Ways and Means.
  • State finances:
    • State net tax revenues across multiple categories (Income, Sales and Use, Corporate, Deeds, Estate, etc.).
    • The 4% surtax treatment under Chapter 62F (not counted toward the cap).
  • Auditors:
    • State Auditor’s annual assessment of whether revenues exceeded allowable levels.

4. Timelines and Procedural Details

  • Reporting cadence:
    • February 2026 Monthly 62F Report provides year-to-date data and remainder-of-year projections for FY26.
    • Quarterly surtax certifications are required (per statutory framework) with a stated period definition.
  • Fiscal year context:
    • FY26 runs through June 30, 2026.
    • The report includes projections for Mar–Jun 2026.
  • Certification and oversight:
    • Annual independent determination by the State Auditor on whether net state tax revenues exceeded allowable revenues.

5. Notable Takeaways

  • Based on DOR’s February 2026 data, FY26 net state tax revenue is projected to be below the allowable cap under Chapter 62F by about $6.52 billion (excluding 4% surtax).
  • The 4% income surtax revenues are treated separately and do not count toward the allowable revenue limitations.
  • The report provides granular revenue-by-category data, enabling close monitoring of whether revenues remain within the Chapter 62F cap as the year progresses.

Compiled from official sources — confirm details with the bill’s official record.

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