The $28.2 billion budget is headed over to the Massachusetts state Senate and House for consideration. The House and Senate will create their own version of the bill before sending it back to Governor Patrick once again. The new budget proposal is for the fiscal year 2011, which begins on July first.
I have taken the liberty of plucking several note worthy components of the budget proposal:
By getting rid of the sales tax exemption for candy and soda, the Governor would in effect be instituting a new tax increase. The budget calls for taxing soda and candy in the hopes of raising an additional fifty-two million. This new revenue would go towards health prevention programs setup to educate the public about healthy choices and habits. The new budget calls for tax hikes on cigars and smokeless tobacco too.
The new budget proposal cuts back on a tax credit program hoping to bring film producers to Massachusetts. Massachusetts film industry insiders argued that cutting the program is shortsighted seeing as the program has been doing well. It has generated more than $1 billion in economic activity over the last four years, but the program is expensive to maintain.
Cuts have also been made reducing a life sciences tax credit designed to lure companies to Massachusetts. While this program has enjoyed success and creation of new jobs for Massachusetts, the program is expensive. The credits will not be eliminated, simply reduced.
The budget proposal will continue to fund the Commonwealth Care program. This program extends health care coverage to 170,000 adults. It is a component from the state’s 2006 health care law.
Gov. Patrick’s budget proposal depends in part upon $600 million in federal aid. The catch is that Congress hasn’t yet approved the bill and if it doesn’t pass, than additional cuts will be needed. The 2011 budget proposal will be a three percent increase over last years budget.
Massachusetts tax attorney Richard M. Stone specializes in advising businesses on sophisticated federal and state tax issues. If you need the help of Massachusetts tax lawyers, get in touch with the Law Office of Richard Stone.
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