Governor Proposes Tax Relief Legislation
Governor Healey has filed legislation to reduce several tax rates and increase tax credits for some
taxpayers that would cost the state $859 million in revenue each year. Her bill includes a proposal
to double the tax credit from $6,000 to $12,000 for homeowners who conduct repairs or replace
failed cesspool or septic systems. Homeowners are finding it increasingly difficult to repair these
systems because of the excessive cost. The bill also seeks to increase the $10 million annual cap
on Housing Development Incentive Program (HDIP) credits to $50 million in the first year, and
$30 million per year moving forward for developers as an incentive to produce more market-rate
housing in the state’s Gateway Cities. Supporters believe expanding the HDIP credits could help
build more than 12,000 new multi-family homes worth $4 billion over the next ten years.
The Governor has also asked the Legislature to reduce the short-term capital gains tax from 12 to
5 percent and to increase the threshold for the state’s estate tax to $3 million. Wisconsin and South
Carolina are currently the only two other states besides Massachusetts that tax short-term capital
gains at a higher rate than long-term capital gains. Massachusetts is one of only 12 states that has
an estate tax and has the lowest threshold in the country.
The House of Representatives and State Senate must now debate this legislation. House Speaker
Ronald Mariano said he wants to watch the trends in future state revenue collections before the
House takes any action on the Governor’s tax legislation. The Legislature is expected to vote on
the annual state budget before taking any action on this proposal.
Legislation Filed to Address Credit Card Surcharges
Several bills have been filed this year that would enable retailers to recoup from their customers
the surcharges imposed on sales transactions when a credit card is used for payment.
Massachusetts is currently only one of two states that does not allow retailers to add the
surcharge to the customer’s invoices. These bills would repeal the law that prohibits this practice
and require the retailer to provide the customer with notice of the surcharge prior to payment
of the invoice. States that have approved this practice typically require one standard surcharge
percentage for each transaction that may not exactly represent the amount charged by each
individual credit card processor.
Unemployment Insurance Contribution Rates Adjusted
The Department of Unemployment Assistance recently advised employers that the schedule used
to calculate employer’s contributions to the Unemployment Insurance Trust Fund will be reduced
to the lowest level – Schedule A for 2023. In 2022 the rates were calculated using Schedule E,
which utilized a significantly higher tax rate schedule. The solvency rate that is imposed on each
employer to help pay for the deficit in the UI Trust Fund will also be reduced from .59 to .37%.
Unfortunately, those tax reductions will be offset by the new COVID-19 assessment that was
imposed last year to help pay for the cost of the state bonding to fund the trust fund deficit due to
the losses incurred during the pandemic. This special assessment is expected to continue for the next four years, which should enable the state to pay off the $2 billion in borrowing costs. The Legislature has appropriated $600 million over the last two years to help reduce the burden on employers, and the MRLDA, along with the many other business trade associations, will continue to advocate for more direct funding from the Legislature to help reduce the burden on employers.
Truck Driver Verification System
We would like to remind members that the Registry of Motor Vehicles provides a Driver Verification System Program (DVS) that enables employers to track the legal status of their truck drivers’ licenses. The system provides employers with email notifications anytime there is a change in their license status. The DVS also allows the employer to obtain the driving record for any driver that you enroll in the program. The record includes all accident surcharges, criminal and civil driving offenses for which a person was found either guilty or responsible, plus discretionary, and administrative license suspension actions.
Employers who are interested in joining the DVS can do so at www.mass.gov/rmv.
Yard Tour Update:
On March 17th Chris Costello and his team at Timberline hosted State Representative Dawne Shand at his yard in Newburyport. Rep. Shand is a first term legislator, and she was pleased to be able to discuss the issues of concern to our industry and learn about the economics of the home building and remodeling industry. Like many of the legislators we have hosted, Rep. Shand has experienced her own home improvement projects so is familiar with the challenges they present. Other MRLDA members who have recently welcomed legislators to their facilities include Koopman Lumber in Andover, National Lumber in Mansfield, Maki Building Centers in Lunenburg, Cape Cod Lumber in Abington, Concord Lumber in Littleton, Hingham Lumber in Cohasset, Mid Cape Lumber in Dennis, and Shepley Wood Products in Hyannis. All of these tours have provided us with the opportunity to connect with our local legislators which we know from experience has helped increase the profile of our association at the State House.
If you are interested in hosting your local legislators at your yard, contact MRLDA Government Affairs Coordinator Nicolina Schonfarber at firstname.lastname@example.org.