HOUSE DOCKET, NO. 1311        FILED ON: 1/18/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1529

The Commonwealth of Massachusetts

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PRESENTED BY:

Jonathan Hecht

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to the taxation of unearned income.

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PETITION OF:

HOUSE DOCKET, NO. 1311        FILED ON: 1/18/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1529

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 2528 OF 2015-2016.]

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninetieth General Court
(2017-2018)

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An Act relative to the taxation of unearned income.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 3 of chapter 62 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by adding a subsection D to read in its entirety as follows:-

In determining the Part A and Part C taxable income, an exemption shall be allowed upon the sum of the Part A and Part C adjusted gross income of such persons in an amount equal to the lesser of $2500 and one third of the sum of such Part A and Part C income for a single person, or a married person filing a separate return, whose total federal adjusted gross income is less than $40,000, and in an amount equal to the lesser of $5000 and one third of the sum of the Part A and Part C income for a married couple filing a joint return whose total federal adjusted gross income is less than $80,000.

SECTION 2. Section 4 of said chapter 62, as so appearing, is hereby amended by striking out subsection (a)(1) and inserting in place thereof the following:-

Part A taxable income consisting of capital gains shall be taxed at the rate of 8.95 per cent for tax years beginning on or after January 1, 2016.

SECTION 3. Said section 4 of said chapter 62, as so appearing, is hereby further amended by striking out subsection (a)(2) and inserting in place thereof the following:-

Part A taxable income consisting of interest and dividends shall be taxed at the rate of 8.95 per cent for tax years beginning on or after January 1, 2016.

SECTION 4. Said section 4 of said chapter 62, as so appearing, is hereby amended by striking out subsection (c) and inserting in place thereof the following:-

Part C taxable income shall be taxed at the rate of 8.95 percent for tax years beginning on or after January 1, 2016, excepting Part C taxable income derived from the sale of investments which: (1) are in a corporation which is domiciled in the commonwealth with a date of incorporation on or after January 1, 2011 which has less than $50 million in assets at the time of investment and complies with subsections (e)(1), (e)(2), (e)(5), and (e)(6) of Section 1202 of the Internal Revenue Service Code; and (2) are held for 3 years or more, which shall be taxed at a rate of 3 per cent; provided, however, that in order to qualify for the 3 per cent rate, such investments shall be made within 5 years of the date of incorporation and, to the extent consistent with the provisions of this subsection, shall be in stock in a corporation that satisfies the requirements for treatment as “qualified small business stock” under section 1202(c) of the federal Internal Revenue Code, without regard to the requirement that the corporation be a C corporation.