Massachusetts Senate Bill S1866

Massachusetts 2023-2024 Regular Session

• Introduced: 2/16/23
• Refer: 2/16/23

Caption

Preventing high-income tax avoidance

Impact

The implementation of S1866 will directly affect the tax liabilities of high-income earners in Massachusetts. By enforcing a consistent filing status between federal and state returns for married couples, the bill could potentially increase revenue for the state by ensuring that wealthy individuals do not exploit discrepancies between the two systems. This is particularly relevant for those whose income levels exceed certain thresholds, as they may have been previously able to mitigate their tax responsibilities under disparate filing choices.

Summary

Senate Bill S1866, titled 'An Act preventing high-income tax avoidance,' aims to amend the tax filing requirements for married couples in Massachusetts. The bill stipulates that if a married couple files a joint return for federal income tax purposes, they must also file a joint return for state taxes. This change is designed to close loopholes that may allow high-income couples to reduce their overall tax burden through strategic filing choices that take advantage of state tax regulations. The bill underscores a focus on increasing tax compliance among wealthier individuals and couples.

Contention

Discussions surrounding S1866 may revolve around the implications of increased oversight on personal income tax filing and the potential for unanticipated consequences. Opponents may argue that the bill could disproportionately impact couples who have legitimate reasons for filing separately, such as with one spouse reporting business losses. Furthermore, there may be concerns about privacy and the intrusiveness of requiring couples to align their federal and state tax filings. Advocates for the bill contend that these measures are necessary to safeguard state resources and ensure fairness in the tax system.