First, the good news. Nearly three million Massachusetts taxpayers are expected to receive rebates over the next few days (either a check or direct deposit) due to the 1986 62F law which set a revenue collection cap. The state will return almost $3 billion to taxpayers because record high amounts of revenue collected in 2022 triggered the 1986 law. Refunds are expected to be about 13% of what was paid in state income taxes for 2021.
Yet despite record-setting revenue collections, proponents of the Question 1 constitutional ballot amendment are still pushing for a 4% income tax surcharge on income over $1 million. This would include pass-through small businesses. Those supporting this tax hike claim the money will be used for transportation and education spending, but there is no actual guarantee a single cent more will be spent on those categories. In fact, the state still has billions of dollars in unspent federal aid that could be used for education and transportation rather than raising taxes on small businesses. NFIB strongly opposes Question 1 and to learn more visit www.nfib.com/MAsmallbiztax.
Finally, the stalled economic development bill that once included estate tax reform and funding for unemployment insurance overpayment waivers, was moved from committee Wednesday evening. The bill was tied up in a conference committee, where it has sat since the August 1st legislative adjournment. The revised bill cut estate tax reform and only allocates $100 million for the UI fund, despite reports estimating $300 million is needed to fully fund waived overpayments. Legislative leaders claim the 62F rebates led to a reconsideration on tax reforms and other spending within the bill. However, several elected officials, including Governor Baker, argued that Massachusetts can afford both the 62F rebates and long-term tax reforms like the estate tax. At the time this report is being written, the bill is expected to be taken up on Thursday. NFIB will provide an update with the outcome.