Gas Tax Freeze Rejected
The Massachusetts House and Senate have rejected proposals that would have suspended the collection of the state’s 24 cents per gallon gas tax through to Labor Day. Legislative leaders argued against the plan citing concerns that the gas tax freeze could violate the terms of transportation bond sale agreements that rely on the gas tax as a source of repayment. They also said they lack confidence that oil companies and gas station owners would pass the entire tax savings along to the consumers. Governor Baker supports the gas tax freeze and is not concerned that it would impact the repayment of bonds. The state of Connecticut recently froze the 25 cents state gas tax collection through Labor Day and New Hampshire Governor Sununu has expressed his support for a similar tax freeze. California Governor Newsome has proposed an alternative approach that would provide a direct payment of $400 to each motor vehicle owner. This issue is likely to be revisited when the House and the Senate debate the annual state budget in April and May. The federal gas tax is currently18.3 cents per gallon for gas and 24.3 cents for diesel fuel.
Real Time Sales Tax Collection
Governor Baker has once again submitted a proposal as part of his annual state budget that would require third-party credit card processors to submit the sales tax collected on retail sales directly to the Department on Revenue on a daily basis. The tax payment included in the processed invoice would be deducted from the payment made back to the retailer. This is the Governor’s third attempt to make this change to the tax collection system. The MRLDA has joined with other retailer groups and payment processors in opposing this proposal. The House of Representatives will debate this issue during the debate on the budget in mid-April.
UI Employer Assessments
The Department of Unemployment Assistance has announced that the unemployment insurance tax rate formula will include the previously proposed payment schedule along with an assessment to pay for the expanded Covid-19 benefits and an to repay the monies borrowed from the federal government. The Unemployment Insurance Trust Fund currently has a balance of approximately $800,000. The administration intends to sell bonds in June in an amount estimated to be between $2 and $3 billion to stabilize the fund balance in advance of an expected increase in collections and a projected decrease in benefits. $300 million in credits that have not been claimed by employers also remain outstanding. The administration is schedule to release their quarterly report on April 15th on the status of the fund and the amount of the bond sale.
Advocates Seek Local Ban on Fossil Fuels
The state Division of Energy Resources recently released their draft proposals to implement a new stretch energy code and a more restrictive Opt-In Code which are designed to reduce the carbon emissions from transportation and building structures. The Opt-In Code would not enable a city or town to prohibit a building from using fossil fuels for new construction. However, the code would require buildings that use fossil fuels to install roof top solar and hookups for all electric utilities including future heating systems. Environmental advocates are disappointed that the administration did not provide communities with the ability to outright ban the use of fossil fuels. The Division held a series of hearings across the state and are expected to release their redrafted proposals within the next few months. It appears the Governor will stand by his opposition to a community wide ban. Several bills that would allow for this option are also pending before the House and Senate which must consider them before the end of the session on July 31st.