Not so Happy New Year for Business in Massachusetts

House Bill 4904, signed into law by Governor Patrick in July as Chapter 173 of the Acts of 2008, drastically raises corporate taxes as of tomorrow, January 1, 2009.

These changes will result in an estimated increased burden of $500 million to be borne by Massachusetts businesses. Combining this new obligation with the most challenging economy for business in the past quarter century could prove fatal for many private corporations. From “check-the-box” to the sting tax, Democrats have characterized these changes as “closing loopholes.” Bottom line: when corporate obligations increase and sales revenues decrease, Massachusetts workers are hurt, which is why the Caucus will be leading the fight to repeal the corporate tax increase in the new year.

During the corporate tax debate, Senate Republicans tried unsuccessfully to lessen the impact of this legislation by offering several amendments, including one which would have allowed for an appropriate implementation period and given the Patrick Administration and others until 2010 to more carefully execute these provisions. Another amendment was filed that would have given cities and towns a one-time nonrecurring local aid payment from the funds generated by the implementation of this act. Unfortunately for private industry and its employees, their attempts were defeated.