Jun 19, 2009 6:02 pm US/Eastern
Your Taxes: What The New Mass. Budget Will Change
BOSTON (WBZ) ―
Massachusetts state lawmakers passed a new budget Friday, for the fiscal year beginning Aug. 1. A conference committee of House and Senate members reached agreement on the $27.4 billion budget Thursday night and it was approved in formal sessions Friday afternoon.
View: 2010 Budget (273 page pdf)
Should Gov. Deval Patrick sign the budget, it will put into place a series of tax hikes for Bay State residents. Patrick has not committed one way or another; he vowed to veto any budget that included a sales tax hike unless pension, ethics and transportation reforms came first. Legislators passed pension and transportation bills this week. Ethics is next on their agenda
SALES TAX
5% --> 6.25%
Under the new budget, sales tax charged at Massachusetts retailers will climb from five percent to 6.25 percent.
The change will cost the average family about $370 a year.
The sales tax provision is expected to raise about $857 million a year (including meals tax), according to lawmakers. Of that money, $275 is earmarked for transportation costs. According to Michael Widmer of the Massachusetts Taxpayers Association, that will abate the need for toll hikes, for now. MBTA fare hikes are still a real possibility.
ALCOHOL TAX
0% --> 6.25%
When you walk into a liquor store in Massachusetts, you will now be charged tax on your alcohol purchases, if the new budget goes into law. Currently, only alcohol sold in restaurants is taxed. The new budget will have liquor stores charging a 6.25 percent tax.
The change is expected to bring an additional $80 to the state annually.
MEALS TAX
5% --> 6.25% --> 7%
Massachusetts restaurants currently charge a five percent sales tax on meals. Under the new budget, the state sales tax on meals would increase to 6.25 percent.
Local towns and cities would have the option of adding their own .75 percent tax, putting the meal tax at your favorite restaurant as high as seven percent.
ROOM TAX
9.7% --> 11.7%
The price you pay to stay in Massachusetts hotels and motels could go up. While the state is not raising their portion of the room occupancy tax, they are giving individual cities and towns the option.
Right now hotel guests pay 9.7 percent in room taxes: 5.7 percent to the state and four percent to the city or town. Municipalities will have the option of raising their portion of the occupancy tax by two percent, for a total tax of 11.7 percent.
WHAT WILL NOT BE RAISED
The budget passed by the House and Senate did not include increases to Massachusetts income taxes, or a 19 percent increase in the state gas tax that was proposed by Gov. Deval Patrick.
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