May 7, 2008
President’s Update on Corporate Tax Bill
Dear Chamber Member:
Late last night, the Massachusetts Senate passed its version of the corporate tax proposal, which coupled a rate cut with several policy changes and expanded state regulatory authority. The issue now goes to conference committee, where the Chamber will continue to work for tax legislation that improves transparency and predictability in the tax code and strengthens employers' ability to grow in
Massachusetts
.
While several Chamber-supported provisions made it into the Senate's bill - including a cut in the corporate tax rate and selected policy language - there are still a number of key areas which the Chamber will work to improve in conference in order to preserve the competitiveness of our economy and job market.
The Chamber has been a consistent advocate for lower
Massachusetts
corporate tax rates; the current rate of 9.5% is the fourth-highest in the country. The Senate bill seeks to address this by reducing the overall tax rate as well as the rates for financial service institutions and S corporations without tying such reductions to state fiscal triggers. The Senate bill also includes combined reporting and federal conformity ("check the box") tax policy changes. However, the Senate bill gives wider discretion to the Department of Revenue (DOR) than did the House
bill in the administration of combined reporting and federal conformity. The Chamber and other business groups are opposed to that level of DOR discretion, as it runs counter to the goal of establishing a clear, predictable, litigation-minimizing tax process for
Massachusetts
businesses.
We at the Chamber will continue to work hard for a bill which includes a significant rate cut coupled with limits on DOR discretion.
Sincerely,
Paul Guzzi
President & CEO