Tax Development Jan 27, 2014
On January 22, 2014, Massachusetts Governor Deval Patrick announced his budget for fiscal year 2015. While much of the budget is focused on investments in education and infrastructure, those in the tax community will be particularly interested in the proposition to close tax loopholes the Governor has attempted to close in past years. Included among these loopholes, according to the summary, is a proposition to impose tax on the markup that online travel companies receive. Similarly, the budget proposes to apply the room occupancy tax on new forms of transient rental, such as apartments, condos, and homes. The budget seeks to close another loophole by applying the corporate tax rate to pass-through entities owned by insurance companies and security corporations.
The budget summary anticipates that closing these loopholes will raise $40 million but expects a new sales tax on candy and soda purchases to raise $57 million dollars for the Commonwealth, which revenue will be entirely dedicated to supporting public health services and infrastructure.
The budget proposal will be reviewed by the House and Senate. After drafting their budget proposals, the Legislature will deliver a compromise budget plan to the Governor before June 30, 2014, the end of the fiscal year.
For more information on the budget, the Governor’s summary is available at:
http://www.mass.gov/bb/h1/fy15h1/exec_15/hdefault.htm
TECHNICAL INFORMATION CONTACT:
Jeremiah T. Lynch
Principal
212.871.3901
jeremiah.lynch@ryan.com