State Mandates New Covid Sick Leave Benefits
Governor Baker recently signed into law a requirement that all employers in Massachusetts provide their employees with up to 40 hours of separate sick leave benefits to cover the need to obtain health care for the treatment of Covid-19. The law also makes employees eligible for this new benefit if they need to care for a family member or wish to leave work to obtain a vaccination. The 40-hour benefit must be prorated for part-time employees and be based on the average number of hours worked each week. The sick leave benefits can be incurred in increments as small as 1-hour.
The maximum benefit is capped at $850 per week and the amount includes the cost of any additional benefits paid by the employer as part of the weekly paycheck. Employers are prohibited from requiring employees to use other sick or leave benefits for Covid related illnesses. Employers with less than 500 employees will be authorized to apply for a Federal payroll tax credit. Larger employees will be directed to seek direct relief from the $75 million fund established by the state. This law took effect on June 7th and is not retroactive. This mandate will end on September 30, 2021 or at an earlier date should the $75 million fund that was allocated to pay for these benefits is exhausted.
Sales Tax Holiday Scheduled for August 14th & 15th
The State Legislature recently established the required annual sales tax holiday weekend for August 14th and 15th. The rules for complying with the holiday will remain the same as in prior years. The tax exemption applies to each single item with a value of $2,500 or less. Items with a higher price are not eligible for any tax exclusion. The benefit is only available to individual consumers and cannot be extended to business customers. Sales that have been previously recorded and paid for prior to the dates of the holiday cannot not be reprocessed on the weekend to provide the sales tax benefit to that transaction. The products sold during the sales tax holiday do no have to be delivered during those two days and can be delivered at a later date.
Governor Proposes 2-Month Sales Tax Holiday
Governor Baker recently asked the Legislature to pass his proposal to create a new sales tax holiday for a period of two months. The Governor’s proposal is in response to the announcement that the state will collect more than $3.5 billion in surplus revenues for the 2021 fiscal year that ended on June 30th. The Governor believes the extended holiday would return up to $900 million of that surplus to consumers and help increase sales at local businesses. His proposal was immediately rejected by the Legislative leadership which listed numerous policy priorities on which they believe the surplus fund should be spent. The additional $3.5 billion in funds comes on top of the $7 billion that the federal government has provided to the state as part of their response to the Covid-19 pandemic.
Legislature Approves Millionaire Tax Ballot Question
The members of the House and Senate met in a Constitutional Convention to overwhelmingly approve a new tax surcharge on annual personal incomes that are greater than $1 million. This proposal will now be placed before Massachusetts voters on the November 2022 general election. Under this proposal, all personal net incomes up to $1 million will be taxed at the current rate of 5 percent. An additional surcharge of 4 percent will be charged for all additional income above the $1 million level. The supporters estimate this new tax will raise an additional $2 billion each year which can be used to fund education and transportation projects. However, there is no requirement that the Legislature allocate the new funds for those purposes. This proposal will impact the owners of businesses that are organized as pass through entities. The MRLDA has joined with numerous other business entities and organization in opposing this proposal. A similar ballot question that was passed in California did not reach the income goals and had several adverse effects on the business community. Many business trade associations and organizations are new gearing up to fund the opposition to this ballot question.
Governor Proposes $250 Million for Housing Initiatives
Governor Baker recently filed a capital spending bill which included $250 million in new spending for the new construction and rehabbing of existing affordable housing units. The bill is also designed to increase payments to communities to encourage them to authorize the construction of higher density single family and multi-family units. The bill also provides incentives for communities to increase housing opportunities around transportation and downtown areas. This proposal is part of the Governor’s ongoing efforts to expand the construction of new housing units in Massachusetts. It follows his successful efforts to reduce the voting thresholds in individual cities and towns on proposed zoning changes that should make it easier to construct higher density housing developments.