With Connecticut phase out, Mass. only remaining New England state imposing Capital Stock Tax

  A new report from the nonpartisan, nonprofit Tax Foundation about capital stock taxes nationally shows that Massachusetts will soon be the only remaining state in New England to impose the tax. The Tax Foundation states that “Unlike corporate income taxes, which are levied on a business’s net income (or profit), state capital stock taxes are imposed on a business’s net worth (or accumulated wealth). As such, the tax tends to penalize investment and requires businesses to pay regardless of whether they make a profit in a given year, or ever.” To view their new report, access https://taxfoundation.org/state-capital-stock-taxes-franchise-taxes-2023

  Connecticut is set to phase out their capital stock tax by 2024, leaving Massachusetts as the only remaining state in New England – and one of only 16 remaining state’s nationally – to impose the outmoded tax.

  “When we talk about allowing Massachusetts to recapture some of its competitive edge, at a bare minimum, we need to eliminate an outdated tax like this. This outmoded levy is directly disincentivizing future investment in Massachusetts businesses and leaving us at a major competitive disadvantage compared to all of our New England neighbors and the country,” noted Massachusetts Fiscal Alliance Spokesperson/Board Member Paul D. Craney.

  Since the narrow passage of Question 1 last November, along with no broad-based tax cuts and eliminations enacted into law by Beacon Hill leaders, Massachusetts has seen its business competitiveness rankings plummet, and industry groups and small business advocates from across the Commonwealth have begun sounding alarms of worry. Over 100,000 taxpayers have fled Massachusetts since the pandemic, and New Hampshire and Florida are the top two destinations.

  “There’s no question that the income surtax has made Massachusetts among the least economically competitive states in the country. With Speaker Ron Mariano, Senate President Karen Spilka, and Governor Maura Healey’s reluctance to enact broad tax cuts and eliminations, such as eliminating the capital stock tax, we are also now among the states investors do not want to invest in. The only question that remains is whether Beacon Hill leaders will have the foresight to enact broad tax cuts and eliminations before its way too late for Massachusetts to recover. Elimination of the capital stock tax is a no brainer, it needs to be immediately eliminated,” continued Craney.

  As seen in an early March CNN interview, Shark Tank’s Kevin O’Leary (Mr. Wonderful) had strong critical words for Massachusetts and its competitiveness (at https://twitter.com/CNN/status/1631659475189858311?lang=en). O’Leary said, “I don’t put companies here in New York anymore, or in Massachusetts, or in New Jersey, or in California. Those states are uninvestable. The policies here are insane. The taxes are too high…”

  “A national tax policy think tank based in DC and a national investor…in Boston are basically saying the same thing, Massachusetts is in serious trouble. If Beacon Hill leaders do not wake up and confront this uncompetitive high tax environment they created, people will continue to get richer simply by moving out of state,” concluded Craney.