Potential New Tax Law in Massachusetts -- Personal Income Tax:
House Passes Tax Package; Would Freeze Rate for Two Years

The Massachusetts House of Representatives has passed, by a wide margin, a tax package that contains Massachusetts personal income tax provisions. The bill would:

1. freeze the tax rate at 5.3% for at least two years,

2. temporarily reduce personal exemption amounts,

3. postpone implementation of a deduction for charitable contributions, and

4. permanently tax capital gains at the same rate as ordinary income. 

Future lowering of tax rates, raising of personal exemption amounts, and implementing of a charitable contribution deduction would be tied to revenue growth.  (H.B. 5054, passed by Massachusetts House of Representatives May 2, 2002.)

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