HOUSE DOCKET, NO. 42 FILED ON: 3/1/2023
HOUSE . . . . . . . . . . . . . . . No. 42
OFFICE OF THE GOVERNOR
COMMONWEALTH OF MASSACHUSETTS
STATE HOUSE · BOSTON, MA 02133
(617) 725-4000
MAURA T. HEALEY KIMBERLEY DRISCOLL
GOVERNOR LIEUTENANT GOVERNOR
March 1, 2023
To the Honorable Senate and House of Representatives,
I am filing for your consideration a bill entitled “An Act Creating Tax Relief for
Affordability, Competitiveness, and Equity.” This tax package, projected to cost $742 million
net to budget in fiscal year 2024 (FY24), is an integral part of my FY24 budget proposal. It
draws on the consensus around tax relief that began to emerge last year and delivers on my
promise to help families across the Commonwealth.
Extraordinary tax growth over the past several years, together with prudent fiscal
management, allows me to propose tax relief which is both responsible and meaningful. The
bill’s total impact of $859 million, including $117 million that would otherwise go to long-term
reserves, stems primarily from substantial tax cuts in four key areas.
The Child and Family Tax Credit is the $458 million centerpiece of our Administration’s
tax proposal. It hits squarely on affordability – for families with young children or disabled or
senior dependents; equity – for low-income caregivers who could use a break in the form of a
refundable credit; and competitiveness – for employers seeking to attract and retain workers in a
state with high child care costs. This expanded and simplified credit would replace two
interrelated dependent credits. The new credit is uncapped and is not limited by income: all filers
will be able to claim $600 for each qualifying dependent, including children under 13, disabled
adults, and seniors. The $600 refundable credit would provide relief for over 700,000 taxpayers
who are supporting over 1,000,000 qualifying dependents across the Commonwealth.
A proposed reduction in the estate tax would increase the Commonwealth’s
competitiveness: Massachusetts is one of only 12 states and Washington, D.C., that impose an
estate tax. In addition, Massachusetts has the lowest threshold in the nation for estates subject to
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tax. Under current law, estates with a gross value over $1 million are subject to taxation, starting
with the first dollar at a rate of 0.8% and growing to a marginal rate of 16%. This bill would
establish a non-refundable $182,000 credit for each estate. The credit would eliminate all taxes
on estates worth $3 million or less in net taxable value, while providing $182,000 of tax relief on
larger estates. This change would benefit all estate tax filers and provide reassurance to aging
Massachusetts residents and their families at a cost of $167 million in FY24 ($272 million for a
full year).
Two provisions touch on affordability of housing by increasing the maximum renter
deduction, as well as the maximum senior circuit breaker tax credit for low-income seniors with
high property tax costs. Current law allows filers to deduct up to 50% of the cost of the rent for
their primary residence, up to $3,000; this bill would increase the maximum deduction to $4,000,
saving renters $40 million annually. Further, the package would double the maximum Senior
Circuit Breaker credit from approximately $1,200 up to approximately $2,400. This credit,
indexed to inflation, provides critical relief to low-income homeowners and renters aged 65 or
older, and would result in $60 million in tax relief.
By aligning the short-term capital gains tax rate with the 5% rate that applies to nearly all
income, including long term capital gains, this bill would address an aspect of Massachusetts’ tax
structure that is out of step with nearly all other states. Because capital gains taxes above a
threshold of approximately $1.4 billion are not available to the budget under current law, this
change can provide $117 million in tax cuts, and bring the tax on capital gains more in line with
other states for over 150,000 taxpayers, without having any impact on budgetary spending.
Ten smaller changes bring $17 million in more targeted tax law improvements that would
also have meaningful impact on key priorities, including housing, workforce, the environment,
and Massachusetts’ vibrant arts, culture and agricultural sectors.
In the area of affordability and equity, this bill would increase the statewide cap on the
Housing Development Incentive Program (HDIP) from $10 million to $50 million on a one-time
basis, and thereafter to $30 million annually. HDIP expands the production of affordable
housing through state tax credits to developers of market rate housing in Gateway Cities. The
package expands occupations eligible for the apprenticeship tax credit and raises a statewide cap
on the program to give it room to grow. The bill exempts any employer assistance with student
loan repayment from taxable income for the employee. The expansion of commuter transit
benefits to include regional transit passes and bike commuter expenses will help address
commuting costs in a climate-friendly fashion and statewide.
A series of targeted tax cuts are potentially of great value for residents of environmental
justice and rural communities. The bill doubles the deductions for lead paint abatement to $3,000
for full and $1,500 for partial abatement. It likewise doubles the maximum credit for septic tank
repair or replacement in a primary residence to $12,000, and allows taxpayers to access these
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credits on a more accelerated schedule. The bill extends the expiring brownfields tax credit
program through 2028, to continue support for cleanup of contaminated properties.
Lastly, the bill touches on target opportunities for competitiveness in regionally and
culturally important activities. A new live theater tax credit would enable qualifying
productions, selected through a competitive award process, to claim a credit for a share of
payroll, production, and transportation costs. The bill would increase the dairy tax credit
statewide cap from $6 million to $8 million, further insulating farmers when wholesale milk
prices decline. Finally, the proposal would adjust the allowable alcohol content in cider and still
wine to allow locally produced hard cider and still wine makers access to a more favorable tax
rate.
I believe you will recognize and like many elements of this bill. I look forward to
working with you over the coming months on finalizing a tax package for the benefit of our
Commonwealth.
Respectfully Submitted,
Maura T. Healey,
Governor
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 HOUSE . . . . . . . . . . . . . . . No. 42
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act creating tax relief for affordability, competitiveness and equity.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Chapter 23A of the General Laws, as appearing in the 2020 Official
2 Edition, is hereby amended by inserting after section 3L the following section:-
3 Section 3M. (a) (1) For the purposes of this section the term “office” shall mean the
4 Massachusetts office of business development established in section 1 of chapter 23A, or any
5 constituent office thereof.
6 (2) There is hereby established a pilot program for a live theater tax credit for which a
7 live theater company doing business with a Massachusetts-based theater venue, theater company,
8 theater presenter or producer may be eligible. The credit shall be established to support the
9 expansion of pre-Broadway productions, pre-off Broadway productions and national tour
10 launches, as those terms are defined in paragraph (1) of subsection (dd) of section 6 of chapter 62
11 and subsection (a) of section 38NN of chapter 63 of the General Laws, and shall assist in the
12 development of long run show development and growth.
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13 (b)(1) The office, directly or through a constituent office, shall run a competitive grant
14 program to award live theater tax credits. An applicant may only be awarded a tax credit if they
15 meet the requisite criteria and qualifications for the credit as outlined in this section and
16 subsection (dd) of chapter 62 of the General Laws or section 38NN of chapter 63 of the General
17 Laws. The office shall establish criteria for prioritization of credits, which may include
18 anticipated economic impact and other factors at the discretion of the office. No more than
19 $5,000,000 may be awarded in any calendar year.
20 (2) An applicant for a live theater tax credit shall properly prepare, sign, and submit to the
21 office an application for certification of the theater production. The application shall include
22 information and data the office deems necessary for the evaluation and administration of the
23 application, including, but not limited to, any information about the theater production company
24 or its related partners or presenters and a specific Massachusetts live theater or musical
25 production. The eligible theater production budget shall be not less than $100,000. The
26 maximum credit for any production shall not be more than $5,000,000, or a lesser amount as
27 determined by the office.
28 (3) The office shall review completed applications, determine whether they meet the
29 requisite criteria and qualifications for certification, and award tax credits at their sole discretion.
30 The office may issue a certification of the eligible theater production or presentation to the
31 theater production company, co-producer or presenter and to the commissioner of revenue. The
32 certification shall provide a unique identification number for the production and shall be a
33 statement of conditional eligibility for the production.
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34 (c) Upon completion of an eligible theater production for which a certification has been
35 granted, the applicant shall properly prepare, sign, and submit to the office and the department of
36 revenue a cost accounting in connection with the eligible theater production. The cost accounting
37 shall contain a cost report and an accountant’s certification. In computing payroll costs,
38 production and performance expenditures, and transportation expenditures for which a credit will
39 be claimed, an eligible theater production shall subtract any state funds, state loans or state
40 guaranteed loans. The office and commissioner of revenue may rely, without independent
41 investigation, upon an accountant’s certification, in the form of an opinion, confirming the
42 accuracy of the information included in the cost report.
43 (d) The office, in consultation with the commissioner of revenue, shall promulgate rules
44 and regulations to carry out this section.
45 (e) The office, in conjunction with the commissioner of revenue, shall report on the
46 impact of the live theater tax credit pursuant to subsection (dd) of section 6 of chapter 62 and
47 section 38NN of chapter 63 of the General Laws and shall submit the report to the clerks of the
48 house of representatives and the senate, the house and senate committees on ways and means and
49 the joint committee on economic development and emerging technologies not later than
50 December 31, 2028. The office and commissioner shall collaborate with the live theater industry
51 to collect the relevant data for the report. Said report shall include data to assess the direct and
52 indirect economic impacts of the live theater tax credit on the economy of the commonwealth,
53 including estimates of theater tickets sales to domestic and international visitors, spending by
54 live theater productions on adjacent businesses, wages paid for setting up and taking down
55 productions, and impacts on businesses in proximity to theaters, including hotels and restaurants.
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56 SECTION 2. Subparagraph (9) of paragraph (a) of part B of section 3 of chapter 62 of the
57 General Laws, as so appearing, is hereby amended by striking out, in line 109, the figure “3,000”
58 and inserting in place thereof the following figure:- 4,000.
59 SECTION 3. Subparagraph (15) of said paragraph (a) of said part B of said section 3 of
60 said chapter 62, as so appearing, is hereby amended by inserting, in line 160, after the words
61 “commuter boat”, the following words:-, or for regional transit authority passes, or for a
62 bikeshare membership or for a bicycle including electric bikes, bicycle improvements, repair,
63 and storage,”
64 SECTION 4. Said paragraph (a) of said part B of said section 3 of said chapter 62, as so
65 appearing, is hereby further amended by adding the following subparagraph:-
66 (20) An amount equal to the amount of student loan payment assistance received by an
67 individual from their employer during the taxable year, and not already excluded under section
68 127 of the Code. For the purposes of this subparagraph, “student loan payment assistance” shall
69 mean the payment of principal or interest on a qualified education loan, as defined in section 221
70 of the Code.
71 SECTION 5. Paragraph (1) of subsection (a) of section 4 of said chapter 62, as so
72 appearing, is hereby amended by inserting, in line 5, after the word “cent” the following words:-
73 provided, however, that any gain from the sale or exchange of capital assets held for 1 year or
74 less shall be taxed at the rate of 5 per cent.
75 SECTION 6. Subsection (e) of section 6 of said chapter 62, as so appearing, is hereby
76 amended by striking out, in line 75, the words “one thousand five hundred dollars” and inserting
77 in place thereof the following words:- $3,000.
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78 SECTION 7. Said subsection (e) of said section 6 of said chapter 62, as so appearing, is
79 hereby further amended by striking out, in line 86, the words “five hundred dollars” and inserting
80 in place thereof the following words:- $1,000.
81 SECTION 8. Subsection (i) of said section 6 of said chapter 62, as so appearing, is
82 hereby amended by striking out, in line 273, the figure “15,000” and inserting in place thereof
83 the following figure:- 30,000.
84 SECTION 9. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
85 hereby further amended by striking out, in line 277, the figure “1,500” and inserting in place
86 thereof the following figure:- 4,000.
87 SECTION 10. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
88 hereby further amended by striking out, in line 279, the figure “6,000” and inserting in place
89 thereof the following figure:- 12,000.
90 SECTION 11. Paragraph (1) of subsection (j) of said section 6 of said chapter 62 of the
91 General Laws, as so appearing, is hereby amended by striking out, in line 290, the figure “2023”
92 and inserting in place thereof the following figure:- 2028.
93 SECTION 12. Said paragraph (1) of said subsection (j) of said section 6 of said chapter
94 62, as so appearing, is hereby further amended by striking out, in line 296, the figure “2024” and
95 inserting in place thereof the following figure:- 2029.
96 SECTION 13. Paragraph (4) of said subsection (j) of said section 6 of said chapter 62, as
97 so appearing, is hereby amended by adding the following sentence:- For the purpose of the
98 Brownfields Redevelopment Fund, state financial assistance shall mean the amount of any grant
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 99 or principal amount of any loan, but shall not include any loan principal repaid as of the date the
100 credit application is filed with the commissioner. Net response and removal costs shall not
101 include any reimbursement that is received, or will be received, by the applicant, or any amounts
102 paid on behalf of the applicant from any source for these costs.
103 SECTION 14. Paragraph (2) of subsection (k) of said section 6 of said chapter 62, as so
104 appearing, is hereby amended by striking out, in line 447, the figure “750” and inserting in place
105 thereof the following figure:- 1,500.
106 SECTION 15. Paragraph (3) of subsection (o) of said section 6 of said chapter 62, as so
107 appearing, is hereby amended by striking out, in line 732, the figure “6,000,000” and inserting in
108 place thereof the following figure:- 8,000,000.
109 SECTION 16. Paragraph (5) of subsection (q) of said section 6 of said chapter 62, as so
110 appearing, is hereby amended by striking out, in lines 896 to 898, inclusive, the words “The total
111 amount of credits that may be authorized by DHCD in a calendar year pursuant to this subsection
112 and section 38BB of chapter 63 shall not exceed $10,000,000 and” and inserting in place thereof
113 the following 3 sentences:- EOHLC may authorize up to $30,000,000 in credits annually under
114 this subsection and section 38BB of chapter 63. In addition, EOHLC may authorize annually (i)
115 any portion of the annual cap on credits not authorized by EOHLC in the preceding calendar
116