The Joint Committee on Revenue heard testimony on the Governor’s bill regarding federal tax reform and how it will impact taxpayers in Massachusetts. The bill calls for delays and phase-ins of specific provisions of the federal tax code that were changed following Congress’ passage of the One Big Beautiful Bill.

The Healey administration argued their call for decoupling from the federal tax code is an attempt to be fiscally prudent. One provision especially important to smaller businesses is the section 179 equipment expensing threshold being increased. Healey’s proposal would delay implementation until 2027, meaning businesses could not take advantage of the savings for 2026. Other delayed and phased in sections included section 163j on business interest and section 174 dealing with research and development tax credits.

NFIB’s testimony urged the committee to conform immediately in order for the Commonwealth to be competitive with other states:

…small businesses in the Commonwealth would see the immediate benefit of increasing the expensing of assets under Section 179. This tax change would allow many Main Street businesses to expense the full value of equipment and other qualifying purchases. By matching the federal limit, Massachusetts small businesses would be better positioned to plan for future investment by guaranteeing tax predictability.

Many advocates are calling for the Governor to decouple completely from the federal tax code, arguing the state needs the money for programs more than businesses and residents. NFIB will continue to monitor and comment on this tax conformity bill as it moves through the legislature.