Earlier this month, 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. This follows earlier action by the House of Representatives, which also coupled a corporate rate cut with several clearly defined policy changes.

The issue now goes to conference committee - a grouping of three members from both the House and Senate who are appointed to resolve differences between the two bills - 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.

As Beacon Hill leaders prepare to enact a 10-year, $1 billion life sciences initiative, the Chamber is continuing to lobby Capitol Hill leaders for an issue of equal importance to the growth of this vital cluster – federal research funding. Gains made by key accounts earlier this decade, including the National Institutes of Health (NIH) and basic and applied Defense Dept. research, have been slowly eroded by several years of inadequate funding.

Federal support of basic and applied research is uniquely important to Greater Boston’s economy – fueling innovation at our world-renowned teaching hospitals, colleges and universities, and cutting-edge start-ups. These research dollars continue to drive medical breakthroughs that cure debilitating diseases and spur pharmaceutical development, generate technological and engineering marvels, and ensure that our most promising young investigators remain in these scientific fields. As one of the leading beneficiaries of federal R&D investment, Massachusetts has been proud to be the incubator for many of these innovations and breakthroughs.

Massachusetts leaders have worked to solidify this world-renowned life science cluster by improving the state’s regulatory environment for groundbreaking research and lab space development, preserving targeted tax incentives to encourage investment and job growth, investing in workforce skills and training programs, and launching one of the most ambitious life sciences initiatives in the nation. However, federal research dollars remain in many respects the lifeblood of the region’s innovation economy.

The Chamber is working with its National Business Coalition for Federal Research members for increases in Defense Dept., Energy Dept., Homeland Security, NASA, NIH, and NSF research funding. A strong federal commitment to research is fundamental to sustaining and growing the region’s innovation economy.

Earlier this spring, the Legislature’s Joint Committee on Higher Education gave a favorable recommendation to a Chamber-sponsored bill that will provide tax credits to employers who offer tuition assistance to college graduates.

The bill (S 2580) is designed to help retain talented college graduates, allow employers to identify key workforce needs, and strengthen relationships between the region’s employers and academic institutions.  It encourages the creation of student-employer agreements where a participating employer pays a portion of a student’s tuition and fees, and, in return, the student agrees to work for the employer following graduation. The Board of Higher Education would administer this program, on a 2 year pilot basis. Participating employers benefit from getting a jump on identifying talented future employees, while qualifying for a 20% state tax credit on the first $5,000 of assistance provided. Students receive significant financial assistance along with a firm job offer prior to graduating.

The bill is now before the Senate Ways & Means Committee for further consideration, and the Chamber will continue to work with key State House officials in an effort to advance this bill through the legislative process.