Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H3261 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1 of 1
2	2	HOUSE DOCKET, NO. 423 FILED ON: 1/9/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 3261
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Erika Uyterhoeven
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act establishing a tax on excessive executive compensation.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Erika Uyterhoeven27th Middlesex1/9/2025 1 of 4
16	16	HOUSE DOCKET, NO. 423 FILED ON: 1/9/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 3261
18	18	By Representative Uyterhoeven of Somerville, a petition (accompanied by bill, House, No.
19	19	3261) of Erika Uyterhoeven relative to establishing a tax on excessive executive compensation.
20	20	Revenue.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Fourth General Court
24	24	(2025-2026)
25	25	_______________
26	26	An Act establishing a tax on excessive executive compensation.
27	27	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
28	28	of the same, as follows:
29	29	1 SECTION 1. Chapter 63, section 81 of the The General Laws, is hereby amended by
30	30	2adding the following new section:
31	31	3 SECTION 82
32	32	4 EXECUTIVE COMPENSATION TAX.
33	33	5 Section 1.
34	34	6 As used in this section, terms shall have the following meanings:
35	35	7 (a)
36	36	8 (1) “Compensation,” in the case of employees of the taxpayer other than the chief
37	37	9executive officer, chief operating officer, or the highest paid employee, means wages as defined
38	38	10in section 1 of chapter 63 of the General Laws. 2 of 4
39	39	11 (2) “Compensation,” in the case of the chief executive officer, chief operating officer, or
40	40	12the highest paid employee of the taxpayer, means total compensation as reported in the Summary
41	41	13Compensation Table reported to the United States Securities and Exchange Commission
42	42	14pursuant to Item 402 of Regulation S-K of the Securities and Exchange Commission.
43	43	15 (b) “Compensation ratio” for a taxable year means a ratio where the numerator is the
44	44	16amount equal to the greater of the compensation of the chief executive officer, chief operating
45	45	17officer, or the highest paid employee of the taxpayer averaged over the three calendar years
46	46	18preceding the beginning of the taxable year and the denominator is the amount equal to the
47	47	19median compensation of all employees employed by the taxpayer, including all contracted
48	48	20employees under contract with the taxpayer, in the United States for the calendar year preceding
49	49	21the beginning of the taxable year.
50	50	22 Section 2.
51	51	23 Every corporation with a net income of $10,000,000 or more doing business in the
52	52	24commonwealth and not expressly exempted from taxation shall annually pay to the
53	53	25commonwealth a tax according to or measured by net income, to be computed at the applicable
54	54	26tax rate upon the basis of the net income for that taxable year, as determined as follows, but in no
55	55	27case shall the tax rate be less than the minimum tax specified in section two of chapter 63 of the
56	56	28General Laws.
57	57	29 The applicable tax rate shall be determined as follows:
58	58	30 (a) If the compensation ratio is over zero but not over 50, the applicable tax rate is the
59	59	31base corporate tax rate plus an additional 0%; 3 of 4
60	60	32 (b) If the compensation ratio is over 50 but not over 100, the applicable tax rate is the
61	61	33base corporate tax rate plus an additional 1%;
62	62	34 (c) If the compensation ratio is over 100 but not over 200, the applicable tax rate is the
63	63	35base corporate tax rate plus an additional 2%;
64	64	36 (d) If the compensation ratio is over 200 but not over 300, the applicable tax rate is the
65	65	37base corporate tax rate plus an additional 4%;
66	66	38 (e) If the compensation ratio is over 300 but not over 400, the applicable tax rate is the
67	67	39base corporate tax rate plus an additional 6%;
68	68	40 (f) If the compensation ratio is over 400 but not over 500, the applicable tax rate is the
69	69	41base corporate tax rate plus an additional 8%;
70	70	42 (g) If the compensation ratio is over 500, the applicable tax rate is the base corporate tax
71	71	43rate plus an additional 10%.
72	72	44 Section 3.
73	73	45 If the total number of full-time employees, determined on an annual full-time equivalent
74	74	46basis, employed by the taxpayer in the United States for a taxable year is reduced by more than
75	75	4710 per cent, as compared to the total number of full-time employees, determined on an annual
76	76	48full-time equivalent basis, employed by the taxpayer in the United States for the preceding
77	77	49taxable year and the total number of contracted employees or foreign full-time employees,
78	78	50determined on an annual full-time equivalent basis, of the taxpayer for that taxable year has
79	79	51increased as compared with the total number of contracted employees or foreign full-time
80	80	52employees, determined on an annual full-time equivalent basis, of the taxpayer for the preceding 4 of 4
81	81	53taxable year, then the applicable tax rate determined under Section 2 shall be increased by 50
82	82	54percent. For taxpayers who first commence doing business in this state during the taxable year,
83	83	55the number of full-time employees, contracted employees, and foreign full-time employees for
84	84	56the immediately preceding prior taxable year shall be zero.
85	85	57 Section 4.
86	86	58 This act shall take effect for the tax year beginning on January 1, 2026.