HOUSE DOCKET, NO. 4489        FILED ON: 7/24/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 4271

The Commonwealth of Massachusetts

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PRESENTED BY:

James Arciero

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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 municipal income-based taxation.

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PETITION OF:

HOUSE DOCKET, NO. 4489        FILED ON: 7/24/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 4271

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act relative to municipal income-based taxation.

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

Chapter 59 of the General Laws is hereby amended by adding the following section:-

Section 95. (a) For the purposes of this section the following words shall, unless the context clearly requires otherwise, have the following meanings:

“Commercial and industrial evaluation” or “CIE”, the sum total of income reported by every business registered in a city or town on the appropriate Massachusetts state tax forms.

“Commercial and industrial levy” or “CIL”, the proportion determined by the city or town the business is registered in of the tax levy rate imposed on business’ total income reported.

“Resident levy” or “RL”, the proportion determined by the city or town the resident is legally residing in of the levy rate imposed on resident’s personal income.

“Total resident evaluation” or “TRE”, the sum total of personal income for every individual legally residing in a city or town as reported on Massachusetts state tax form 1.

(b) Notwithstanding any general or special law to the contrary, if a city or town accepts this section by a vote of its city or town council, town select board or board of selectmen, the city or town may, in accordance with this section, assess local taxes based on personal or business income instead of local real property taxes pursuant to section 2A.

(c) Under subsection (b), each city and town shall hold classification hearings to determine the proportion of its tax levy requirements for RL and CIL respectively. The sum of RL and CIL will equal the total amount the city or town must raise through local taxes.

(d) The city or town's income based tax rate for residents shall be calculated by dividing the city or town's RL from its TRE.

(e) The city or town’s income based tax rate for businesses shall be calculated by dividing the city or town's CIL from its CIE.

(f) The city or town shall levy taxes on its residents equal to the resident's personal income multiplied by the income based residents tax rate.

(g) The town shall levy taxes on its businesses equal to the income based commercial and industrial tax rate multiplied by the reported business income.