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May 25, 2006 - Yesterday,in the first hour and a half of debate, Senator Richard T. Moore (D-Uxbridge) and his Senate colleagues overwhelmingly approved several tax relief measures to include in the Senate’s budget for fiscal year 2007. The bipartisan effort included the adoption of: an incremental income tax rollback, property tax relief for seniors and veterans, and a sales tax holiday weekend. By including these amendments, the Senate stays true to its goal to focus on communities, residents, and the future of the Commonwealth.
“Yesterday’s actions are the most recent in a series of tax cuts that the Senate has passed over the last three years. We have initiated and enacted 16 different types of tax relief to benefit the individuals and businesses of this state,” said Senator Moore. “These initiatives show that the Senate is willing to come together for the good of the residents of the Commonwealth.”
“By approving these measures we continue to craft a careful and responsible approach to bring tax relief to the residents of the Commonwealth,” said Senator Therese Murray (D-Plymouth), the Senate’s budget chief. “While our economy has not fully recovered, the Senate understands the need for tax relief and has taken the steps within this budget and throughout the last several years to answer that call in a financially responsible manner.”
During the Senate’s debate, several tax measures were approved that will directly effect the Commonwealth’s residents. These measures include:
• State Income Tax Rollback: The amendment would trigger an incremental income tax roll back to five percent if each of the local aid accounts (Chapter 70, lottery aid, and additional assistance) reaches 2002 levels, adjusted for inflation. If the funding levels are met in fiscal year 2008, the income tax would be reduced 5.2% for calendar year 2007, to 5.1% for 2008, and to 5% beginning in 2009 and thereafter.
• Senior Property Tax Relief: This amendment gives municipalities the option, by a town or citywide referendum, to exempt their low-income senior citizens who are at least 70 years old from property tax amounting to 5% of the average assessed value of all residential parcels in the community. Once adopted, it also gives municipalities the option to increase the exemption amount to as much as 20% of the average assessed value and to reduce eligibility age to 65 years.
• Veterans Property Tax Relief: This amendment would allow town or city councils to increase the allowable property tax exemption amount for veterans from $250 to up to $1,000.
• Sales Tax Holiday: This amendment would, for a third year, create a sales tax holiday. This year’s sales tax holiday would be the weekend of August 12 and 13. Similar to last year, exceptions to the exemption include: vehicles, motorized boats, tobacco, meals and utilities.
Along with the amendments approved during the debate, two tax relief initiatives were included in the Committee’s budget recommendations. The first will enable commuters to deduct at least $150 and no more than $750 from their income taxes as a portion of the expense associated with FastLane tolls and MBTA and commuter rail passes.
The second would help facilitate the transition from welfare to work, through a Work Opportunity Tax Credit of up to $2,400 for employers who employ welfare recipients for at least 400 hours. It would also provide bonuses to employers who create long-term positions. The credit supplements the federal Welfare-to-Work Tax Credit and is designed as an incentive for businesses to provide these residents with a steady job.
These tax relief initiatives mark the most recent efforts by the Massachusetts Senate, working in a bipartisan manner to provide targeted relief for businesses and individuals through: heating energy assistance, senior tax relief, increasing the personal tax exemption, expanding research and development tax credit, extending the Brownfields tax credit, and new tax credits and incentives for the movie industry.
The Senate will continue debate on the budget today. Once passed by the Senate, a conference committee will resolve the differences between the House and Senate versions. The committee will then send a final version of the budget to the Governor to be signed into law.
For more information on the FY 2007 Senate budget, log onto Senator Moore’s website at
www.senatormoore.com/budget
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