Earlier this year, Senate President Karen Spilka asked the Chamber to participate in the Senate Revenue Working Group. The Senate President convened the group and tasked them with reviewing the Massachusetts state tax code in order to identify ways that the Commonwealth can modernize and improve our existing system. The working group is chaired by Senator Adam Hinds and consists of 21 leaders, from a variety of organizations and government offices, with expertise in tax and economic policy. The group is split into several subcommittees: Sales Tax, Income Tax, Corporate Tax, and Other Taxes. Chamber CEO Jim Rooney fills a leadership role in the working group as the Co-Chairman of the Other Tax Subcommittee.
The ‘Other’ Subcommittee has identified several focus areas that the Chamber and our partners on the subcommittee are studying for opportunities to recommend modernizations and improvements.
Tobacco products are not taxed in a uniform way in Massachusetts. While cigarettes are stamped to provide proof of tax payment, a variety of other tobacco products (OTP), including cigars, smoking tobacco for pipes, and smokeless tobacco, are not. The subcommittee considers this an area where improvements to collections could be made in order to fully realize the tobacco sales revenue due to the Commonwealth and is studying the recommendations made by the Department of Revenue’s Illegal Tobacco Taskforce.
Massachusetts last raised its taxes on alcohol in 1979. The subcommittee studied results and recommendations from the Alcoholic Beverages Control Commission of Massachusetts 2017 task force report and is including the alcohol tax as a focus area for improvement.
Massachusetts levies an estate tax on estates worth over $1 million, which is the lowest threshold in the nation among states that levy an estate or inheritance tax. Most states have neither. The estate tax in Massachusetts is particularly aggressive and applies to the full value of the estate rather than the value in excess of $1 million. The subcommittee is studying the interplay of the state estate tax with the federal estate tax, comparisons to other states, as well as revenue estimates from the Department of Revenue to identify recommendations for modernization of the estate tax.
Currently, revenue raised from the room occupancy tax is not going back to the tourism industry but into the general fund. As a result, the travel and tourism budget pales in comparison to competitive states, and revenues raised from visitors to Massachusetts are impacted. We are considering the best measure to improve this revenue stream by taking into account practices of similar states.
The subcommittee is hosting regular meetings with experts in each category and conducting robust discussions about the best steps forward for the Commonwealth that rely on data and established best practices. The working group plans to finalize a comprehensive report or detailed recommendations in 2020.
Our peers in the other subcommittees have also been hard at work discussing improvements and updates to the Earned Income Tax Credit, rate of taxation on ‘unearned income’, point of sales technology, and the interplay of state and federal tax code especially as it affects corporations after the Tax Cuts and Jobs Act, among many other topics.
Members of the Senate Revenue Working Group
Senator Adam G. Hinds (D – Berkshire, Hampshire, Franklin and Hampden), Chair, Senate Revenue Working Group
Senator William Brownsberger (D- Belmont), Senate Vice Chair of the Committee on Revenue
Frank Callahan, President, Massachusetts Building Trades Council AFL-CIO
JD Chesloff, Executive Director, Mass Business Roundtable
Nancy Creed, President, Springfield Regional Chamber
Peter Enrich, Professor of Law, Northeastern University School of Law
Deb Fastino, Executive Director, Coalition for Social Justice
Senator Ryan Fattman (R- Sutton), Member, Joint Committee on Revenue
Christina Fisher, Executive Director for Massachusetts and the Northeast, TechNet
Hilary Bacon Gabrieli, Tax Policy Attorney
Harris Gruman, Executive Director of the SEIU Massachusetts State Council
Beth Huang, Director, Massachusetts Voter Table
Eileen McAnneny, President, Massachusetts Taxpayers Foundation
Tim Murray, President & CEO, Worcester Regional Chamber of Commerce
Amy Pitter, President & CEO, Massachusetts Society of CPAs
John Regan, Executive Vice President of Government Affairs, Associated Industries of Massachusetts
Mayor Dan Rivera, City of Lawrence
Marie-Frances Rivera, President, Massachusetts Budget & Policy Center
James E. Rooney, President & CEO, Greater Boston Chamber of Commerce
David E. Sullivan, Attorney
Steven A. Tolman, President, Massachusetts AFL-CIO
Megan Greeley is the Government Relations Manager for the Greater Boston Chamber of Commerce.