Over 40 state referendum ballot questions cleared the Massachusetts Secretary of State’s initial filing deadline. While the initiatives cover a wide range of topics, two tax-related questions may be particularly important for small business owners.

The first question calls for a 1% reduction to the state income tax rate from 5% to 4% over a 3-year period. The rate drops to 4.67% on 1/1/2027, to 4.33% on 1/1/2028, and then to 4% on 1/1/2029. This may be beneficial for many pass-through small business owners who file their taxes as individuals.

Along those same lines, another question seeks to modify the state’s 62F laws that caps state tax collections by returning excess revenue to taxpayers. This 1986 law was triggered twice in the last 40 years, first in 1987 and then again FY2022 where taxpayers were refunded roughly 14% of their state personal income tax liabilities back. The proposed ballot question will force Massachusetts to include millionaire’s tax revenue (currently excluded) in the revenue calculation to trigger more frequent refunds for the state’s taxpayers.

NFIB will reach out next month via special ballot to gauge whether members are in favor of these two questions.

Additional questions on the sales tax, retail crime, energy bills, and other topics were filed and may also gain traction. We will continue to monitor all questions that will impact small businesses.