Thursday, March 31, 2011

Chamber Tax Reforms Gain Support

Speaker DeLeo endorses key proposals of Chamber tax reform bill

Key proposals from the Chamber’s Business Tax Reform bill have garnered support among top state officials – including a recent endorsement by House Speaker Robert DeLeo and the launching of a tax policy development website by the DOR.

Speaker DeLeo’s Endorsement
During his prepared remarks at the Chamber’s March 15 Government Affairs Forum this month, Speaker DeLeo stressed the need for state tax administration reform in order to improve the Massachusetts economy and strengthen the relationship between business and government. Specifically, he endorsed proposals to:
  1. Require the DOR to regularly publish reports on its prospective tax policies, in order to improve transparency and enhance early taxpayer input on such policies; and
  2. Shorten audit cycles by waiving taxpayer penalties for substantial underpayment of taxes (Ch. 62C, Sec. 35A) if the DOR fails to complete an audit within 18 months.
These provisions were first proposed as part of the Business Tax Reform bill filed by the Chamber in January – a bill that was crafted in collaboration with PwC and is based on the valuable feedback that the Chamber’s policy team received from members last fall. The bill is designed to improve Massachusetts state tax procedures and promote taxpayer fairness via a) interest rate parity; b) statute of limitations parity; c) shortened audit cycle lengths; and d) early notification of tax policies under development.

DOR Tax Policy Development Website
The Speaker’s endorsement follows the March 3 launch of a DOR website featuring public written statements on tax policies that are currently under development. Prior to the launch of the site, there was no requirement that taxpayers receive prior notice of tax policy changes being worked on by the DOR.

The Chamber is pleased to have played a key role in advancing this important issue. However, some differences remain between the Chamber proposal and the DOR site, primarily around the frequency with which the issues on the site are updated and the amount of information on each issue that is required to be posted. As a result, the Chamber plans to continue to pursue its stronger version of the tax policy development site as contained in the Business Tax Reform bill and endorsed by the Speaker.

The Chamber will continue working with the House, Senate, and Patrick Administration in an effort to advance these and other important tax proposals.

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