For quite some time, Republican lawmakers have been saying that Massachusetts is becoming less and less business friendly. Between last year’s corporate tax increase and this year’s dramatic hike in the state’s sales tax, Massachusetts is driving out potential investors and discouraging Commonwealth residents to open up local businesses. And now, some Democrats are catching up to where we’ve been for years!
According to a weekend article in the MetroWest Daily News, an international business lobby said “tax policy enacted last year punishes foreign companies, who have subsidies in the state by slapping such companies with taxes for investments in their Massachusetts outlets as well as normal business transactions like loans or royalty payments with such subsidiaries.”
Now, one of our Democratic colleagues is filing legislation that would make it easier for international companies to do business here. And there are more Democrats jumping on that bandwagon, saying we need to encourage businesses to come to our state.
Earlier this year, at least one major business group, the Organization for International Investment (OFII), advised its member companies to “suspend consideration of new investments and expansions in Massachusetts” because of the recent tax law changes. OFII represents over 150 U.S. subsidiaries of foreign-based companies, and its member companies currently employ over 173,000 people in Massachusetts, or nearly 6 percent of the Commonwealth’s private sector workforce.
Around the same time, House and Senate Republicans launched an effort to preserve Massachusetts jobs by repealing the $500 million corporate tax increase that took effect on January 1, 2009.
Twenty Republicans co-sponsored the legislation to repeal the tax increase and eliminate some of its more onerous provisions, including the new unitary combined reporting requirement. These tax changes impact many multi-state companies that are based outside of Massachusetts but employ nearly 40 percent of the state’s workforce.
Republican lawmakers have been trying to make Massachusetts a more business friendly state for a long time. Unfortunately, it has taken significantly longer for our colleagues on the other side of the aisle to catch up.
Our corporate tax repeal bill was heard last week in a hearing, where it will go next is unknown at this time.