Effective January 1, 2010, the corporate tax rate in Massachusetts will drop from 9.5 percent to 8.75 percent, while the financial institution tax rate will drop from 10.5 percent to 10 percent.
Those reductions, combined with the effective lowering of the tax rate for S corporations, will deliver about $56 million in tax savings to businesses in fiscal year 2010.
The reductions are scheduled to continue in tax years 2011 and 2012. The corporate rate is scheduled to go down to 8.25 percent in 2011 and 8 percent in 2012, while the financial institution tax rate is scheduled to drop to 9.5 percent in 2011 and 9 percent in 2012.
How, in the middle of a revenue downturn, is it possible to reduce business tax rates?
You may recall that Gov. Patrick and the Legislature created a tax code study commission in 2007. The commission's recommendations led to reforms in the corporate tax code signed in July 2008, most importantly, the introduction of combined reporting and so-called "check-the-box" reform. Combined reporting is designed to stop corporations from shifting taxable profits to low-tax or no-tax jurisdictions by requiring them to combine the reporting of profits from all locales and then to apportion a share of the total to Massachusetts. Check-the-box means corporations can no longer choose a tax status for Massachusetts that is different from the one they choose for the IRS.
But part of the new law was also a reduction in corporate tax rates. The argument was that while large, multi-state corporations could wind up pay more as a result of these reforms –even with a reduced tax rate — Massachusetts-based businesses would get a boost from lowering the rate. And that is about to happen. Some 35,000 or so Massachusetts-based businesses will see tax rate reductions.
Something worth celebrating at the start the New Year.
Why do most Massachusetts taxpayers file electronically? Lots of good reasons. posted on Mar 17
If you haven’t filed your Massachusetts personal income tax return, there are very good reasons to consider e-filing. Millions of taxpayers have already taken advantage of e-filing, the most convenient way to get your taxes done. Why are we confident that e-filing is the very …Continue Reading Why do most Massachusetts taxpayers file electronically? Lots of good reasons.
MassTaxConnect for Fiduciary Taxes – Get Started on December 5, 2016! posted on Nov 14
With WebFile for Income Stepping Aside, MassTaxConnect Steps Up MassTaxConnect, the Commonwealth’s new tax revenue system, will be expanding to include fiduciary and other taxes on December 5, 2016. As you may already know, WebFile for Income is now officially closed as we prepare to …Continue Reading MassTaxConnect for Fiduciary Taxes – Get Started on December 5, 2016!
November 6: WebFiIe for Income Makes Way for MassTaxConnect posted on Nov 4
WebFile for Income says goodbye as MassTaxConnect welcomes more taxpayers In anticipation of MassTaxConnect expanding to include 10 additional tax types, WebFile for Income will say goodbye to users on November 6 at midnight. Save the date – pay bills electronically through November 6 If …Continue Reading November 6: WebFiIe for Income Makes Way for MassTaxConnect