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Moore favors compromise on capital gains tax |
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BOSTON, November 29, 2005 - Senator Richard T. Moore (D-Uxbridge) sent a letter today asking Senate President Robert Travaglini (D-South Boston) to address a recent controversy over the 2002 retroactive capital gains tax by considering Governor Mitt Romney’s compromise amendment. In the May of 2002, to help address the state’s financial crisis, the state reinstituted the capital gains tax increase. Earlier this year, however, the Supreme Judicial Court ruled the effective date (May 1, 2002) to be unconstitutional and pushed back the effective date to January 1, 2002. The result is that nearly 50,000 taxpayers will have to pay retroactive taxes on capital gains realized between those three months, despite having already filed tax returns, and paid any taxes then due, for 2002. “I was among the senators who argued that this was unfair because taxpayers had not had sufficient notice of the tax change,” said Moore in his letter. “At the time, I agreed that we should follow the process used in Congress to consider the announcement of the proposal to be sufficient notice and that the tax be applied only on capital gains from May 1, 2002 and thereafter.” Since the Court also rejected that proposal, Senator Moore urged backing Governor Romney’s proposed solution. In his letter, the senator expressed support for changing the effective date of the tax laws to January 1, 2003 and refunding those taxpayers who paid the higher capital gains tax rate in the last eight months of 2002. Under the governor’s amendment, the refunds would be spread over the next three fiscal years. However, to preserve funds for necessary expenditures in the future, the senator proposed including language that would provide for freezing the refund if revenues fall below a certain benchmark. “I believe that this is a reasonable proposal as far as it goes,” Moore added. The senator called for quick action on the Governor’s amendment, asking that the Legislature address the measure in the coming weeks; and suggested that the Department of Revenue be directed to suspend collection of the tax pending legislative resolution when formal sessions resume in January. At this time, the department has notified taxpayers to pay their retroactive capital gains tax before the end of this calendar year. For additional information on Senator Moore, please visit www.senatormoore.com. |
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