Department of Revenue May 2026 Monthly Report

194th Legislature (2025-2026)

DOR’s May 2026 outlook shows FY26 net state tax revenue remains below the 62F allowable cap, with 4% surtax excluded from that cap.

Placed on file

Summary of SD 4006 (Session 194th) – Department of Revenue May 2026 Monthly Report

Purpose and Intent

The bill centers on the Department of Revenue’s (DOR) May 2026 monthly 62F report, which provides year-to-date net state tax revenue, projections for the remainder of the fiscal year, and an assessment of whether net state tax revenue may exceed the allowable state tax revenue under Chapter 62F.

It confirms that, based on DOR estimates, FY26 net state tax revenue is not projected to exceed FY26 allowable state tax revenue. It also notes that 4% income surtax revenues are not subject to 62F limitations.

Key Provisions and Data Highlights

Annual reporting framework:

On or before September 2, DOR must prepare and submit an annual 62F report detailing net state tax revenues and allowable state tax revenues for the preceding fiscal year to the State Auditor, with copies to clerks and legislative chairs (in lieu of the prior June 62F report).

May 2026 report highlights (as presented):

Year-to-date net state tax revenue excluding the 4% surtax (through May 31, 2026): $38,421,957,764.
DOR estimate of total net state tax revenue for FY26: $42,712,803,321.
DOR estimate of allowable net state tax revenue for FY26: $48,266,193,259.
Projected difference: net state tax revenue is expected to be below allowable by $5,553,389,938.

4% income surtax treatment:

The 4% surtax revenue is excluded from the 62F-based allowable revenue calculations.
DOR provides a separate certification context for the surtax portion (estimated $3,125,952,481 for the July 2025–April 2026 period; subject to revision).

Exhibits and calculations:

Exhibit 1: Detailed year-to-date by tax type (e.g., Income, Sales, Corporate, Deeds, etc.) contributing to the total net state tax revenue before subtracting the 4% surtax.
Exhibit 2: Estimate of the allowable state tax growth factor for FY26 (1.0405620) based on calendar-year wage growth.
Exhibit 3: Methodology and figure for allowable state tax revenue for FY26 ($48,266,193,259).
Exhibit 4: Projection of year-end net state tax revenue versus allowable revenue, including remaining FY26 months.

Affected Parties

State government and agencies:

Massachusetts Department of Revenue (primary), Office of the State Auditor (reviewing 62F determinations), and the Massachusetts General Court (receives briefings via clerks and committee chairs).

No direct fiscal policy changes are enacted; rather, the bill documents and formalizes DOR’s May 2026 projections and historical comparison under Chapter 62F rules.

Procedural and Timeline Aspects

The May 2026 62F report is submitted to Clerks of the House and Senate and Chairs of Joint Committee on Revenue; the annual full 62F report replaces the June monthly 62F report and is due on or before September 2.

The State Auditor independently determines, each year, whether net state tax revenues exceeded allowable revenues for the preceding fiscal year.

Bottom Line

SD 4006 codifies, documents, and communicates DOR’s May 2026 revenue outlook under 62F, reaffirming that FY26 net state tax revenues are projected to remain below the allowable cap, with 4% surtax revenues excluded from that cap. It also outlines the annual reporting cadence and the specific exhibits supporting the projections.