Massachusetts pursuit of tax rebates derailed

August 3, 2022

Keith Goble


An effort to provide tax relief for some Massachusetts residents has been derailed. A 1980s state statute is cited for ending the pursuit to provide relief through tax rebates from higher costs for goods and services.

Legislative leaders in the Bay State reached a deal on a massive economic relief package to combat inflation. One component within a series of tax breaks sought by lawmakers was a plan to pay individual tax filers $250 and joint filers $500.

Single filers earning from $38,000 to $100,000 in annual income in 2021 would be eligible for tax rebates. Joint filers with minimum annual income of $38,000 to $150,000 also would qualify.

The rebates were expected to be issued to qualified taxpayers by Sept. 30.

Funds to cover the rebates were to come from the state’s fiscal year 2022 surplus. The FY2022 surplus is estimated at more than $3 billion.

Democratic leadership in both chambers opted to pursue the rebate option instead of relief at the fuel pump.

Their argument against a fuel tax holiday mirrors sentiment in many other states: there is no guarantee a fuel tax holiday would lower prices at the pump.

1980s tax provision halts pursuit

Demise of the tax relief plan is due to a 1986 tax cap measure.

The ballot measure approved nearly 40 years ago forces Massachusetts to return nearly $3 billion to taxpayers this fall. The tax cap that is expected to be triggered results from state surplus revenues.

By Sept. 20, the state auditor will determine if the state has exceeded a threshold that is partly based on an annual figure linked to wage and salary growth.

Gov. Charlie Baker’s administration is looking into other ways to provide more tax relief to residents.

One administration analysis is for taxpayers to see 7% of their 2021 income taxes returned. The amount is estimated at $250 for taxpayers earning $75,000. LL

More Land Line coverage of news from Massachusetts.