Last week, the Massachusetts House debated an economic development and tax relief package. This was based on legislation originally filed by Governor Baker in January.
While nothing was included to provide direct relief for small businesses’ concerns with rising inflation, the House plan did offer $523 million in tax relief.
The package includes:
- $250 rebates for individuals earning between $38,000-$100,000 and $500 for couples filing jointly and earning less than $150,000.
- A child tax credit increase, from $180 per child to $310 per child, and ends the two-child cap.
- A property tax break for seniors of up to $1,755, from $750 currently.
- Rent deduction cap increase from $3,000 to $4,000.
Important for small businesses is the reforms made to the estate tax, which seeks to increase the exemption to $2 million from the current $1 million and ends the fiscal cliff (meaning the tax will only applies to amounts over $2 million). Presently, Massachusetts has the lowest exemption in the nation at $1 million.
The package also included $300 million to fund waived UI overpayments so employer UI taxes will not have to cover the expense. It is vital that the legislature pays for these overpayments because it is not the responsibility of Massachusetts employers who are already forced to pay back billions of dollars in federal UI debt.
Admittedly, this legislation does very little to offer relief or address the impact of ever-rising inflation.
The Senate version of the bill will be debated on Thursday, July, 21st and includes similar estate tax reform (only it is credit based). However, the Senate reduced the UI overpayment funding to $100 million. We urge small businesses (if they have not already done so) to contact their state senator urging them to restore the full funding for UI overpayments.
