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March 6, 2023

Restaurant sales tax collections jump, as Mass. tax collections rose in February

A collage of three photos, one showing the interior of a brewery, one showing a person standing on a ladder with a t-shirt in their hand, and one of shelves full of various items Photo | WBJ File Owners of high-profile Worcester small businesses including (from left) Redemption Rock Brewing, Worcester Wares (pictured is owner Jessica Walsh), and Crompton Collective are saying consumer support is not what it once was.

The Massachusetts Department of Revenue on Friday announced its preliminary collections of $1.979 billion in February, which included a 32% increase in meals tax collections on restaurant sales.

The $1.979 billion is an increase of 9% over the previous year’s February and more than $49 million more than the department’s benchmark. 

Collections for fiscal 2023 have totaled approximately $23.651 billion, which is $37 million less than the same period over fiscal 2022. According to the Department of Revenue, collections have exceeded the year-to-date benchmark by $999 million.   

“February collections increased in withholding, sales and use tax, and ‘all other tax’ in comparison to February 2022,” DOR Commissioner Geoffrey Snyder said in a press release on Friday. “These increases were partially offset by decreases in non-withholding income tax. The increase in withholding is likely related to labor market conditions and the increase in sales and use tax reflects, in part, continued strength in retail sales. The increase in ‘all other tax’ is primarily attributable to estate tax, a tax category that tends to fluctuate.”

One of the major reasons for the increase in revenue collections was an increase in meals tax, which falls under sales tax collections. In February, the state collected $99 million, which was $22 million more than February 2022 and nearly 32% more than the state’s benchmark for the year. 

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