Last week, NFIB testified before the Joint Committee on Revenue in opposition to Governor Healey’s Municipal Empowerment Act that allows cities and towns to further increase local option taxes.
>>> IN THE NEWS: Read State Director Christopher Carlozzi’s March 6th Boston Herald op-ed on the Municipal Empowerment Act HERE <<<
The bill allows municipalities to:
- Increase the local option meals tax from 0.75% to 1%.
- Increase the local option occupancy tax from 6% to 7% (6.5% to 7.5% in Boston).
- Create a new annual 5% tax on a vehicle’s value.
NFIB noted that permitting local governments to approve tax hikes on meals and hotel stays will have a negative impact on two industries hardest hit by the pandemic. Consumers are already paying more due to rising menu prices and higher travel expenses; they do not need higher taxes to act as a further disincentive to spend money.
NFIB reminded lawmakers that most small businesses require vehicles use to deliver food, transport workers to a job site, or bring products to store shelves. If employers must pay more to register vehicles, that cost will be passed along to consumers. Additionally, we warned this would be a tax on small business workers that require their cars to travel to jobs, many without a work from home option.
While this is an optional tax increase that would require local lawmakers to approve, it is worth mentioning that 251 communities levy the current local option meals tax while 217 municipalities impose a local option occupancy tax. Based on the local leaders testifying in favor of the Governor’s plan at the Revenue hearing, cities and towns are thirsting for more revenue and eager to use these local option taxes as the vehicle to deliver more money into their coffers.
