Beacon Hill is off to its usual slow start for the 2023 legislative session. Bills were filed, but committees are waiting to be assigned so the hearing process is not yet underway. But things will begin to move fairly rapidly when Governor Maura Healey files her FY24 budget in March.
Tax relief is still very much on the minds of both legislators and their constituents. While tax reform didn’t pan out for 2022, lawmakers will likely revisit some form of tax relief this session. It is speculated that Governor Healey may even include tax relief in her budget proposal. The state is projected to experience additional economic growth with revenue, once again, above benchmarks this year, helping to make the case for tax reforms. NFIB sent letters to Speaker Mariano, Senate President Spilka, and Governor Healey outlining how best provide relief to assist small businesses in Massachusetts. The letter recommended lawmakers lower the income tax rate, end the sting tax, and increase the estate tax exemption to $5 million.
Unemployment insurance taxes will continue to be an issue this year. While at rate schedule A, UI taxes will remain somewhat similar to last year’s bills due to a COVID-19 assessment levied to repay the $2.7 billion borrowed from the federal government. The cost burden now falls on the shoulders of Massachusetts employers because lawmakers only allocated $500 million to shore-up the trust fund. These layoffs that depleted the fund were not the fault of small business owners, rather a result of state mandated shutdowns and restrictions. NFIB continues to push for additional money, whether it be remaining ARPA aid or excess tax revenue, for the UI trust fund.
Finally, before the ink was even dry on the $15 minimum wage, activists now want to raise it to $20. Massachusetts already has one of the highest minimum wages in the nation at $15, and while many business owners have increased compensation to contend with labor shortages, raising the base wage is still problematic. This will further drive up the wage scale at a time when employers are still dealing with staffing issues, supply chain problems, and inflation. These same activists are also calling for a gradual phase-out of the tipped wage for restaurants, despite many servers preferring the current model. NFIB will fight these efforts to raise operating costs in Massachusetts.
Please continue to watch your inbox for additional legislative updates once session officially gets underway and bills move through the committee process. To contact your lawmakers on the need for tax relief, CLICK HERE.
