Amendment #1357 to H3800

Long-Term Capital Gains

Representatives Connolly of Cambridge, Elugardo of Boston, Gouveia of Acton, Robinson of Framingham, Hecht of Watertown, Provost of Somerville, Sabadosa of Northampton, Livingstone of Boston, Gentile of Sudbury, Kearney of Scituate, Hendricks of New Bedford, Barber of Somerville, Garballey of Arlington, Capano of Lynn, DuBois of Brockton and Hawkins of Attleboro move to amend the bill by adding the following 3 sections: “SECTION XX. Section 4 of chapter 62 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by striking out subsection (c) and inserting in place thereof the following subsection:

(c) Part C taxable income shall be taxed at the rate of 8.95 per cent, 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.

SECTION XX. Section 5G of chapter 29 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

After each quarter, the department of revenue shall certify to the state comptroller the amount of tax revenues estimated to have been collected during the preceding quarter from capital gains income. If the department of revenue certifies that the amount of tax revenues estimated to have been collected from capital gains income exceeds $1,500,000,000 in a fiscal year, the comptroller shall transfer quarterly any such amount that exceeds $1,500,000,000 collected during that fiscal year to the Commonwealth Stabilization Fund established in section 2H. The $1,500,000,000 threshold established in the preceding sentence shall be adjusted annually to reflect the average annual rate of growth in United States gross domestic product over the preceding 5 years based on the most recently available data published by the Bureau of Economic Analysis in the United States Department of Commerce.

SECTION XX. Subsection C. of said section 3 of said chapter 62, as so appearing, is hereby amended by adding the following 3 paragraphs:-

(c) In the case of a single person or a married person filing a separate return who is 65 years of age or older or who is disabled and whose federal adjusted gross income is less than $40,000, an exemption shall be allowed in an amount equal to the lesser of $1,650 or 1/3 of Part C adjusted gross income.

(d) In the case of a married couple filing a joint return, 1 of whom is either 65 years of age or older or is disabled and whose federal adjusted gross income is less than $80,000, an exemption shall be allowed in an amount equal to the lesser of $1,650 or 1/3 of Part C adjusted gross income.

(e) In the case of a married couple filing a joint return, both of whom are either 65 years of age or older or disabled and whose federal adjusted gross income is less than $80,000, an exemption shall be allowed in an amount equal to the lesser of $3,300 or 1/3 of Part C adjusted gross income.”.

Additional co-sponsor(s) added to Amendment #1357 to H3800

Long-Term Capital Gains