Politics & Government

You May Pay Less in Income Taxes Next Year

State law says that the state must reduce the tax rate by .05 percentage points if "certain collections benchmarks are met," reported the Boston Business Journal.

The commonwealth of Massachusetts is doing so well with collecting income tax this year that the state may have to automatically cut the income tax rate on Jan. 1.

The state is on track to collect about $13 billion in income tax at the current 5.25 tax rate. State law says that the state must reduce the tax rate by .05 percentage points if “certain collections benchmarks are met. Those triggers will remain in place until a minimum income-tax threshold of 5 percent is reached.” Three of the five benchmarks have already been hit this year, reported the Boston Business Journal.

The Department of Revenue estimates that cutting the tax rate from 5.25 to 5.2% would mean the commonwealth would lost $60 to 70 million in revenue in fiscal 2014, reported Boston Business Journal.

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