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SD 3868

Department of Revenue March 2026 Monthly Report

194th Legislature (2025-2026)

March 2026 projections show FY26 net state tax revenue below the 62F allowable threshold, with the 4% surtax excluded from 62F calculations.

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Bill Summary · SD 3868

Summary: SD 3868 (Session 194th) – Department of Revenue March 2026 Monthly Report

Note: This is a Massachusetts bill focusing on the Department of Revenue’s (DOR) March 2026 monthly report for the fiscal year 2026 (FY26) under Chapter 62F.

Purpose and Intent

  • The bill presents and requires the Department of Revenue to submit a March 2026 monthly report detailing:
    • Year-to-date net state tax revenue for FY26 (excluding the 4% income surtax)
    • An estimate of total net state tax revenue for the remainder of FY26
    • An estimate of whether and when net state tax revenue may exceed the allowable state tax revenue for FY26
  • It reflects statutory requirements for ongoing monitoring of revenue relative to the 62F framework, including the special treatment of the 4% income surtax revenue.

Key Provisions and Projections

  • 4% Income Surtax: Revenue from the 4% surcharge on personal income tax is not subject to the normal 62F allowable revenue limitations. This is explicitly noted and accounted for in the calculations.
  • Current FY26 Projections (as of March 31, 2026):
    • Year-to-date net state tax revenue (excluding 4% surtax): $30,032,776,903
    • Estimated full-year net state tax revenue (excluding 4% surtax): $42,571,422,487
    • Estimated allowable state tax revenue for FY26: $48,266,193,259
    • Estimated difference (net state tax revenue minus allowable): -$5,694,770,772
  • Conclusion: Based on DOR’s estimates, FY26 net state tax revenue is projected to be below the allowable state tax revenue. In other words, the state is not projected to exceed its 62F allowable revenue for FY26, under the current data and assumptions.
  • Exhibits and Calculations:
    • Exhibit 1: Breakdown by tax type showing year-to-date figures and the exclusion of the 4% surtax
    • Exhibit 2: Estimate of the allowable state tax growth factor for FY26 (1.0405620), built from calendar year wage growth data
    • Exhibit 3: Calculation of allowable state tax revenues for FY26
    • Exhibit 4: Year-to-date and projected remaining FY26 revenue by category, with updated totals and the 4% surtax adjustment

Who/What Is Affected

  • Massachusetts Department of Revenue (DOR): Responsible for compiling, certifying, and projecting revenue figures under Chapter 62F
  • State Comptroller and related fiscal offices: Use the DOR projections for budgetary and accounting purposes
  • Legislators and oversight bodies: Use the report to assess whether net state tax revenues may exceed allowable thresholds

Procedural and Timeline Aspects

  • Report Date: March 31, 2026
  • Legal framework: Subsection (d) of section 2BBBBBB of section 17 of Chapter 29; Chapter 62F governs allowable state tax revenue and annual certification
  • Certification requirement: The State Auditor independently determines annually, by the third Tuesday of September, whether net state tax revenues exceeded allowable state tax revenues for the previous fiscal year
  • Ongoing process: This March 62F report feeds into quarterly-certification and annual assessments of revenue sufficiency and compliance with 62F

Bottom Line

  • The March 2026 62F report indicates that FY26 net state tax revenue is projected to be below, not above, the allowable state tax revenue. The 4% income surtax remains excluded from the 62F limitations for purposes of these calculations. If data remain consistent, there is no anticipated exceedance of the 62F limit for FY26. For questions, the contact provided is Tim Rooney, DOR CFO.

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

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