Amendment #3 to H4397

Study of inventory tax

Mrs. O'Connell of Taunton moves to amend the bill by adding the following section:-

"SECTION XXX. (a) Notwithstanding any general or special law to the contrary, there shall be a special commission to investigate, analyze and study the balance of benefits and costs associated with the elimination of the so-called “inventory tax” and its derivative revenue measures. As used in this section, “inventory” is defined as: inventory held for sale; finished goods; products, goods, wares or stocks held in trade; work in progress; materials or supplies; and archived or stored goods.  The phrase “inventory tax and its derivative revenue measures” shall refer collectively to: (i) both the tangible property measure and the net worth measure of the non-income portion of the corporate excise tax as levied by the department of revenue, including minimum dollar amounts thereof; (ii) the personal property tax as levied by municipalities in the commonwealth; and (iii) inventory included in the property factor of the multi-factor test used to calculate the corporate income tax obligations of multi-state entities.

(b) The special commission shall consist of 13 members including:  the secretary of administration and finance, or a designee, who shall serve as chair; 6 members appointed by the governor, 1 of whom shall be a practicing member of the corporate tax bar, 1 of whom shall be a practicing tax accountant, 1 of whom shall be from the Associated Industries of Massachusetts, 1 of whom shall be from the National Federation of Independent Businesses, 1 of whom shall be from the Massachusetts Municipal Association, and 1 of whom shall be from New Jobs for Massachusetts; the secretary of housing and economic development, or a designee; 1 member of the house appointed by the speaker; 1 member of the house appointed by the minority leader; 1 member of the senate appointed by the senate president; 1 member of the senate appointed by the minority leader; and the President of Teamsters Local 25, or a designee.

(c) The commission study shall include, but not be limited to, taxation of inventory held by any person or entity whether corporate, non-corporate, partnership, pass-through entity, disregarded entity, multi-state entity, sole proprietor or individual; and regardless of how the obligation is incurred, whether through a municipal tax, state excise tax or minimum thereof, or as a component of the taxable basis of the Massachusetts corporate income tax.

(d) The commission shall submit its findings and recommendations, together with drafts of legislation necessary to carry those recommendations into effect by filing the same with the clerks of the house of representatives and senate, the house and senate committees on ways and means, the joint committee on revenue, and the joint committee on housing and economic development not later than nine months after the first meeting of the commission is convened.

(e) The commission shall conduct its first meeting not later than 60 days after the effective date of this act."