Tax Package Approved

The bill summary below was prepared jointly by the House and Senate press offices for release at 3:30PM, today, September 26, 2023. Full text of the legislation appears here. House and Senate negotiators filed their report today. Both branches will approve the legislation over the next couple of days and send it to the Governor for her approval. I’m pleased to support this compromise package. Update on 9/28: Both branches have approved this package now.

Tax Relief for Massachusetts 

Fact sheet and highlights 

Included in this document are highlights of the Conference Committee’s plan to provide responsible tax relief to Massachusetts’ residents and businesses and make the Commonwealth more affordable, equitable, and competitive. The total impact for fiscal year 2024 will be $561.3 million, with a $519.3 million on budget impact. In fiscal year 2027, when fully phased in, the total impact will be $1.02 billion, with a $969.3 million on budget impact. 

Child and Dependent Tax Credit 

  • Increases the tax credit for a dependent child, disabled adult, or senior from $180 to $310 in taxable year 2023, and then to $440 in taxable year 2024 and beyond, per dependent, while eliminating the child/dependent cap. 
  • This expanded credit, which will benefit more than 565,000 families, will be the most generous universal child and dependent tax credit in the country. 

Estate Tax 

  • Reduces the estate tax for all taxpayers and eliminates the tax for all estates under $2 million by allowing a uniform credit of $99,600.  [WB Note: This mechanism eliminates the current cliff effect.]

Earned Income Tax Credit 

  • Increases the earned income tax credit from 30% to 40% of the federal credit. 
  • This increase will provide crucial support to working individuals and families, benefitting nearly 400,000 taxpayers with incomes under $60,000. 

Single Sales Factor 

  • Moves from a sales tax apportionment system that factors in property, payroll, and sales to an apportionment that only considers sales, thereby removing a disincentive for Massachusetts companies to hire or grow in-state and making it more attractive for companies to headquarter in Massachusetts. 

Senior Circuit Breaker Tax Credit 

  • Doubles the maximum senior circuit breaker credit from $1,200 to $2,400,. 
  • This increase will make it easier for approximately 100,000 seniors who struggle with high housing costs to stay in their homes. 

Rental Deduction 

  • Increases the cap on the rental deduction from $3,000 to $4,000. 
  • This change will support approximately 800,000 renters across the Commonwealth. 

Short Term Capital Gains 

  • Reduces the tax rate on short-term capital gains from 12% to 8.5%. 

Housing Development Incentive Program (HDIP

  • Increases the statewide cap from $10M to $57M one-time, and then to $30M annually. 
  • This increase will create an estimated 12,500 new homes in Gateway Cities, spurring over $4 billion of private investment in these communities. 

Low Income Housing Tax Credit 

  • Raises the annual authorization from $40M to $60M. 
  • This increased authorization cap provides enough funding to spur the creation of thousands of new units of affordable housing annually while also bolstering economic activity and ancillary market-rate housing. 

Local Option Property Tax Exemption for Affordable Housing 

  • Permits municipalities to adopt a local property tax exemption for affordable real estate that is rented by a person whose income is less than a certain income level set by the community. 

Title V Cesspool or Septic System Tax Credit 

  • Triples the maximum credit available from $6,000 to $18,000 and increases the amount claimable to $4,000 per year, easing the burden on homeowners facing the high cost of septic tank replacement or repair. 

Additional Tax Changes 

  • Lead Paint Abatement: Doubles the credit to $3,000 for full abatement and $1,000 for partial abatement, to support families with older homes. 
  • Dairy Tax Credit: Increases the statewide cap from $6M to $8M, to provide more assistance for local farmers during downturns in milk prices. 
  • Student Loan Repayment Exemption: Ensures that employer student loan payments are not treated as taxable compensation. 
  • Commuter Transit Benefits: Makes public transit fares, as well as ferry and regional transit passes and bike commuter expenses, eligible for the commuter expense tax deduction. 
  • Apprenticeship Tax Credit Reforms: Expands the occupations for which this workforce development credit is available. 
  • Cider Tax: Raises the maximum amount of alcohol for these classes of drinks to 8½%, allowing more locally produced hard cider and still wines to be taxed at a lower rate. 
  • Senior Property Tax Volunteer Program: Increases from $1,500 to $2,000 the maximum that municipalities may allow for certain seniors to reduce from their property tax by participating in the senior work-off program. 

Policy Highlights 

  • Requires payments made if Chapter 62F is triggered to be paid out equally amongst taxpayers. 
  • Requires married taxpayers who file a joint return with the federal government to file a joint state return, subject to exemptions or adjustments promulgated by the department of revenue

($ millions; FY27 is fully phased in amount.)

Tax FY24 FY25 FY26 FY27 
Single Sales Factor -$0 -$40 -$82 -$85 
Short-term Capital Gains -$42  -$44 -$47 -$49 
Child and Dependent Tax Credit -$165 -$301 -$304 -$307 
Estate Tax -$128 -$208 -$213 -$213 
Earned Income Tax Credit (EITC) -$85 -$85 -$86 -$87 
Low Income Housing Tax Credit -$19 -$39 -$58 -$97 
HDIP -$0 -$10 -$23 -$25 
Senior Circuit Breaker -$60 -$62 -$65 -$67 
Rental Deduction -$40 -$41 -$42 -$44 
Title V Tax Credit -$4 -$7 -$11 -$15 
Commuter Transit Benefits -$11 -$11 -$12 -$12 
Student Loan Repayment Exemption -$2 -$3 -$6 -$9 
Lead Paint Abatement -$3 -$3 -$3 -$4 
Dairy Tax -$2 -$2 -$2 -$2 
Apprenticeship Tax Credit -$0 -$2 -$2 -$2 
Cider Tax -$0.3 -$0.3 -$0.3 -$0.3 
TOTAL COST (Does not reflect positive revenue impact of change to joint filing tax status. The “net” total reflects that the short term capital gains adjustment only affects stabilization deposits, not the budget.) -$561.3 Total 
-$519.3 net 
-$858.3 Total 
-$814.3 net 
-$956.3 Total 
-$909.3 net 
 -$1018.3 Total
 -$969.3 net 


Please share your questions below and I’ll try to get answers. Comments also welcome!

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

48 replies on “Tax Package Approved”

  1. This isn’t really a comment but is a question.
    When would the tax law changes go into effect if the bill is passed?

    1. In general, the changes apply for the 2023 tax year and beyond. See the last section of the bill.

      In particular, the estate tax changes apply to estates of decedents dying on or after January 1, 2023.

      A few measures do not take effect until 2024, including some of the low-income housing tax credit rules and the rule about filing jointly with the state if you file jointly at the federal level. Some corporate tax apportionment changes do not take effect until 2025.

  2. I’m not knockin’ this good work, but I wonder what wonder what it would be like to wrangle a fair and adequate amount in taxes if the Commonwealth hadn’a abandoned its moral origins and abstained from preying on its citizens with the state lottery and now are subjecting our children to unmediated onslaught of private gaming and liquor ads on our audio-visual infrastructure and print ads on the T.

  3. Very few of those tax breaks benefit productive people who due to their education or natural good business sense, drive, talents, and hard work, pay high state taxes. And so their exodus to New Hampshire and Florida will continue. We will see the negative results of that in 5-10 years.

    The prevailing mindset on Beacon Hill is that we need to make life easier for non-wealth-producing people, but keep the tax burden high on the productive/wealth producing class. This is extremely short-sighted because such policy attracts more and more people who rely on tax subsidies, while it deters those who don’t.

    Giving tax breaks to renters appears considerate, but it is really a hand-out to landlords (and large landlords don’t need it). The impact on the renters’ bottom line will be negligible. The state should be doing everything in its power to promote and enable home-ownership, not incentivize working-age renters to remain renters. Otherwise Massachusetts will be stuck with a huge number of elderly poor renters – and it will be a very costly problem for Beacon Hill down the road.

    Overall all, it looks like this legislation will help blunt the impacts of inflation (i.e., harmful inflation-producing policies), but only for certain, chosen businesses and households (renters, low-income seniors). It is not the kind of tax relief that can spur the economy and motivate people to be industrious and hard-working.

    Lastly, it would be good if our elected officials solicited constituents’ feedback on tax policies before they are decided, not after.

    1. My sentiments exactly. Non-productive people, burdens to society, will increasingly benefit more through the coming years at the expense of others; the one party Hackdom State will see to it.

      1. There are some pretty unpleasant value judgements in these two comments. I do not think that people toward the top of organizations are somehow necessary for everybody else to have a job and are somehow more important than people towards the bottom. In fact I think that is ridiculous. In my business life I am generally at the top of the food chain. I am not that special, and definitely replaceable. Further, the best thing for the economy is when most people are doing well. That means more customers with more to spend. That is good for business. Finally, the state of MA is the second wealthiest state in the country according to the U.S. Chanber of Commerce. So whatever we are doing seems to be working.

        1. Wrong. And most EBT recipients would agree with you. Now, that’s ridiculous.

          States Ranked by Wealth

          # State GDP per capita GDP
          1 District of Columbia $233,500 156 billion
          2 New York $96,502 1.9 trillion
          3 Massachusetts $95,029 664 billion
          4 Washington $90,034 697 billion
          5 California $89,540 3.5 trillion
          6 North Dakota $85,647 66 billion
          7 Connecticut $85,609 309 billion
          8 Delaware $83,922 84 billion
          9 Alaska $79,139 58 billion
          10 Nebraska $78,500 154 billion
          11 Illinois $76,825 973 billion
          12 Wyoming $76,577 44 billion
          13 Colorado $75,860 441 billion
          14 New Jersey $75,549 700 billion
          15 Minnesota $75,234 429 billion

          1. Well clearly we see humanity differently. Not sure what the point you are trying to make with the list of GDP per capita. I do however appreciate that your that list confirms my point that MA is the second wealthiest state.

  4. If a senior would like to get a discount on their property tax and is not able (because of health issues) to work it off is there another way they can get property tax reduction?

  5. I am quite shocked and pleasantly surprised. I had done a spreadsheet comparing the MA tax regime to other New England states and states MA residents usually retire to and MA looked terrible in comparison. Being honest, I would still advise high net worth people to leave MA but this is a positive step. Congrats

  6. Will, can you break down the aggregate numbers ($561 million, $1.02 billion) so we can see how much is accounted for by each element of the package? And so we can see how much will go to low-income taxpayers v. high-income (or high-wealth) taxpayers and to small businesses v. large businesses? It looks like everyone got something out of this deal, but it’s impossible to tell who got how much. Thanks.

  7. “ Requires payments made if Chapter 62F is triggered to be paid out equally amongst taxpayers”
    Oh, really? Income redistribution once again. Get ready for graduated tax next, but I expect that many in this forum will take it and like it. I will be joining the thousands leaving this State of Hackdom shortly. Below are excerpts of my prior emails with the Senator about 62F. It seems he was for “equity” all along. The hypocrisy; at least I will not be paying for his salary much longer.

    On Fri, Apr 14, 2023 at 3:51 PM Erik Jepsen wrote:
    It is a matter of fairness. Why should everybody receive the same rebate when the amounts paid in state taxes are uniquely individualized by income. Those asking for a change are re-distributing monies out of my pocket into somebody else’s. I don’t want to take a cut from those who make far more that I do, or give to those who made less. I just want what belongs to me – and that’s fair.
    Thanks for getting back to me. Kindly share your thoughts once you make up your mind.
    Erik Jepsen
    On Fri, Apr 14, 2023 at 12:56 PM Brownsberger, William (SEN) <William.Brownsberger_at_masenate.gov_wrote:
    Thanks for writing. Not sure what I think on this one. We'll see what suggestions are made. No law is perfect. But I'm not seeing a strong sentiment for change on it among my colleagues. Will Brownsberger

    DuckDuckGo did not detect any trackers.

    More ?

    Thanks for writing. Not sure what I think on this one.

    We'll see what suggestions are made. No law is perfect.

    But I'm not seeing a strong sentiment for change on it among my colleagues.

    Will Brownsberger State Senator
    Fenway, Allston, Brighton, Watertown, Belmont, West Cambridge
    617-722-1280 (office)
    617-771-8274 (cell)

    1. This 62F provision will probably get axed by the courts. Its main function is to serve as a talking point for progressives to justify their vote for a package that includes regressive policies like the short-term capital gains cut and single sales factor apportionment.

      1. I hope you are right. We are now dealing with INEPTOCRACY – Ineptocracy (in-ep-toc’-ra-cy) – a system of government where the least capable to lead, are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

        1. Whatever the merits, perhaps the most salient point about the 62F change is that 62F is almost never used. It’s only been used once in history and may never be used again. The circumstances that triggered it were financially unique.

  8. The lack of transparency in this lengthy process makes it impossible to understand who compromised on what issues and where constituent input might have made a difference in what was ultimately approved. What are your thoughts on the process?

    1. The measure has had a lot of media attention and both branches publicly debated amendments to the bill. The Senate took a lot of input and had a lot of discussion on the floor. I got many emails from constituents. From my perspective, the process was fine.

  9. This is great progress, esp. re estate tax, child credit and housing. I do see that the product “baby oil” retains its exemption from the sales tax (a short but old story on that, sometime). Congrats to you and to your colleagues. This is really a big deal.

  10. I am not great with understanding finances but I think this is an incredible piece of legislation.
    I have family struggling with student loans / I am active in supporting affordable housing especially for the mentally ill. I believe we need to help all with employment opportunities so bring companies to Mass – and help for renters – older homes – so needed. A great piece of legislation!!

  11. To what extent is total Massachusetts tax revenue reduced by these measures? Why are we not instead spending the money on our crumbling transportation systems and expanding passenger rail service, which would favorably impact in a tangible way many of the problems that these tax concessions purport to address?

      1. From my understanding, the monies received from the millionaires tax are essentially redistributed back to the rich in the form of tax cuts, nullifying the gains we had made. It’s incredibly infuriating, especially given the amount of campaigning and work that went in to getting that passed.

  12. The legislature’s reaction to it is what speaks volumes. They have embraced income redistribution, and shown their true colors in the process. Someone please explain their rationale to equally return tax monies to those who should not receive them. Free stuff in return for votes comes to mind.

  13. I don’t mind removing taxes for certain industries and residents that need relief. With that said this is a lot of revenue that we will need to account for in future budgets. What ways is the state legislature looking to account for this? Some regulatory reform might be helpful in recent years we’ve gotten some new via gambling, cannabis legalization, removing toll booths and going to automated tooling, and some of the zoning reform. While I don’t expect to find any big solutions now I would like to see a focus on some more potential reforms to pay for this and future tax relief. Even small changes can pay for things like the dairy or cider tax etc. Please if possible look at what other states are currently doing and see if any might be a fit for Massachusetts.

  14. Will what exactly is meant by. Senior Circuit breaker tax? I see the amount but don’t know that languag What does that refer to?

  15. Senator, I don’t know anyone who would turn down a tax cut, but I have to wonder how much better off the state and its citizens might be if we paid our state debts down as much as possible. The latest figures I located, at (but in line with Forbes and other sources) indicate that the per capita debt – the total amount owed by the state and local governments divided by the number of residents of the state – is in the range of $14,000 to $15,000 per person, ranking Massachusetts either #3 or #4 in per capita debt. In terms of absolute debt – the total amount the Commonwealth and cities and towns owe – it’s something like $103 billion according to! That’s a staggering sum and unsustainable in the long term and puts the state in the top 10. What plans (if any) do we have to trim this debt?

    1. In the meantime, the Commonwealth is paying $45M monthly to house 20,000 “migrants”. I suspect the per capita debt will be larger henceforth.

  16. More robbing Peter to pay Paul. As mentioned by several people already, this will create more incentive to leave the State if you are productive. Conversely, more people will be attracted to the State who are less productive. Eventually there will be no more money to fleece out of the productive and things will fall apart. The most disagreeable part is that nobody will be held responsible, as usual.

  17. A half baked solution to a broken tax structure. Why not a senior citizen discount on property taxes limiting it to no more than 10% of AGI. This can be really simplified when you file at the end of tax year. We got this god awful bureaucratic thorn bush of paper work that has to be done each year to re-qualify at the municipal level. The burden on seniors is unconscionable. The tax expenditure can be debited on ch 70 and other aid to make up the loss. Seeing the “voluntary” credit for proptax work off is just earned income at minimum wage at a earning max of $2000. This speaks volumes about what the legislature thinks of senior citizens. The option is property tax deferral which is fancy way of saying deferred equity theft. Small wonder why the only time I vote in state elections is when there is ballot questions.

  18. Why was the short-term capital gains tax cut, and approximately how many people will benefit from this?

    1. I can’t make that argument because I didn’t vote for it, except as part of the compromise.

      I’ve asked for an explanation of the cost computation for the change, which should include a count of the people affected.

  19. Could you please explain precisely how that “tax credit” on the estate tax works. Seems like it neither actually raises the exemption to $2 million nor eliminates a “cliff effect”. Does that tax credit diminish according to total estate? Does it apply only to income between $1 mil and $2 mil? Does it somehow phase out or suddenly stop? If it phases out, estates won’t get the full $2 mil exemption. If it only applies to the full $2 mil, then there is a tax cliff at $2 mil + $1 dollar. If the tax credit does not quite cover (diminishes as $2 mil is approached), then it is misleading to say it provides a $2 mil exemption.

    Bottom line: it sounds fishy.

    1. I think it works right. The maximum amount of the credit is set to offset the tax on a $2 million estate. But the credit is also limited to the tax due. So, if the estate is $1.5 million, the credit is what the tax would have been on $1.5 million and the tax due is zero. If your estate is $2 million and one dollar, your tax is the difference between the full tax on $2,000,001 and the full tax on $2,000,000 (in other words a few cents).

  20. Thank you Will. My fear, of course, is that “tax credits” make an easy target for cutting or eliminating during a “fiscal crisis”. Why not simply legislate that up to $2 Mil is tax exempt instead of creating a Rube Goldberg plan that will make accountants richer?

    1. I disagree. The tax credit approach will absolutely be as rock solid politically as any other approach.

      The reason for using the credit (as opposed to a deduction) is to avoid shifting the brackets downward for those at higher levels.

      And it is not complicated from an accounting standpoint.

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