By Bob Katzen

The Senate 38-1, approved a tax relief package that supporters said will provide $561.3 million in tax relief in fiscal year 2024 and $1.02 billion per year in subsequent years.

Provisions include increasing the rental deduction cap from $3,000 to $4,000; reducing the estate tax for all taxpayers and eliminating the tax for all estates under $2 million by allowing a uniform credit of $99,600; increasing the refundable tax credit for a dependent child, disabled adult or senior from $180 to $310 per dependent in taxable year 2023, and then to $440 in subsequent years while eliminating the child/dependent cap; doubling the refundable senior circuit breaker tax credit from $1,200 to $2,400; increasing the refundable Earned Income Tax Credit from 30 percent to 40 percent of the federal credit; and reducing the short-term capital gains tax rate from 12 percent to 8.5 percent.

Other provisions double the lead paint tax credit to $3,000 for full abatement and $1,000 for partial abatement; ensure that employer student loan payments are not treated as taxable compensation; make public transit fares, as well as ferry and regional transit passes and bike commuter expenses, eligible for the commuter expense tax deduction; increase from $1,500 to $2,000 the maximum that municipalities may pay seniors to do volunteer work to reduce their property taxes; raise the annual authorization for the low income housing tax credit from $40 million to $60 million; and allow cities and towns to adopt a local property tax exemption for affordable real estate that is rented by a person whose income is less than a certain level set by the municipality.

“We are thrilled to deliver on our promise to pass tax cuts that will result in real savings for the people of Massachusetts, including the country’s largest child and family tax credit that will go back in the pockets of parents and caregivers,” said Gov. Healey. “Everywhere we go, we hear about how people are struggling to keep up with the rising cost of living. This tax package delivers savings for those who need it most, while making long overdue changes that will better allow Massachusetts to compete with other states.”

“This tax relief package strikes the critically important balance of providing permanent financial relief to residents and businesses across Massachusetts, without compromising the long-term financial security of the commonwealth,” said House Speaker Ron Mariano (D-Quincy). “I’m confident that this tax reform legislation will help to make Massachusetts more affordable for all residents, while also helping to make the commonwealth more competitive with other states.”

The measure also includes two provisions which the opponents said will result in tax hikes. One would require Massachusetts married couples who file income tax returns jointly at the federal level to do the same at the state level. The other changes are the system under Chapter 62F that requires that annual tax revenue above a certain amount collected by the state go back to the taxpayers. Under current law, the money is returned to taxpayers based on what he or she earned and paid in taxes. The new tax package changed that and provided that each taxpayer will receive a flat rate refund, unrelated to what they earned or paid in taxes.

“The High Tech Council appreciates the effort Gov. Healey and the Legislature put into this first step towards addressing the state’s tax outlier status,” said High Tech Council President Chris Anderson. “Unfortunately, the final tax ‘relief’ legislation falls short of delivering the meaningful change needed, as it includes both an expansion of the voter-approved income surtax and an unconstitutional redistribution of income through changes to the voter-approved Chapter 62F rebate formula.”

Anderson concluded, “The High Tech Council looks forward to collaborating with Gov. Healey, her cabinet and legislators across the commonwealth who are committed to defending and strengthening our business climate and the associated high quality of life it brings to Massachusetts residents.”

(A “Yes” vote is for the tax relief package. A “No” vote is against it.)

Sen. Patricia Jehlen Yes