MA Taxpayers To Get $2.94 Billion Credit Due To Odd State Law

MASSACHUSETTS — The state owes you close to $3 billion.

State Auditor Suzanne Bump on Thursday ruled that an arcane 1980s state law will require the state to return $2.94 billion in excess tax revenue to residents. The 1986 law deems that annual state tax revenue growth can't exceed the sum of wages and salaries of all state residents in a given fiscal year.

In fiscal year 2022, which ended June 30, the state collected $41.8 billion in tax revenue. But the maximum allowable revenue for that fiscal year was about $38.8 billion.

The one item Bump did not rule on: exactly how that $2.94 billion credit should be returned to residents.

In her report, Bump noted that this same scenario happened in 1987. The state owed taxpayers about $29.2 million (that's million with an M). The credit came as a line item on the 1988 Massachusetts Individual Income Tax Return form, where residents could claim a share of the credit against taxes owed.

But since then, the state has never exceeded the allowable tax revenue growth under the 1986 law. According to Bump, it'll be up to the Commissioner of Revenue to determine how taxpayers get the credit.

On top of the $2.94 billion owed to taxpayers, the state had a surplus of $2.3 billion at the end of the fiscal year. Gov. Charlie Baker two weeks ago filed a supplemental budget that would spend about $840 million of that surplus. That would leave an additional $1.5 billion and $2.2 billion in federal stimulus funds for the state to spend — possibly on even further tax relief, Baker said.

Some quick math: if you divide just the $2.94 billion by the state population of 6.83 million, that's about $430 per man, woman and child in the state.