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New Laws Affect Massachusetts Taxpayers In 2019

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    Each year new laws take effect and some can have an impact on personal finances. There are several such laws in Massachusetts in 2019. 

   An estimated 662,000 workers in Massachusetts received a pay raise on Tuesday. That’s because the minimum wage rose to $12 from $11.  It was the first step in a series that will push the base hourly rate to $15 in 2023.

    But as the government gives, it also can take away. 

    For hourly wage workers who toil on Sundays, premium pay starts to go away this year.  The mandatory time-and-a-half pay calculation is being adjusted down until it is eliminated in 2023.

    A new payroll tax takes effect in Massachusetts this year.  It will fund a paid family and medical leave program.  The benefit won’t be available until 2021.  But starting on July 1st, the state will begin collecting the 0.63 percent tax from employers and workers.

    All this is the result of the grand bargain – the legislative compromise forged on Beacon Hill last summer to head off several initiatives from reaching the November election ballot.

  "Had they all gone forward and had they all passed (it) would have put this Commonwealth and our standing economically in jeopardy," said State Rep. Joe Wagner in an interview last year.

    The Democratic lawmaker from Chicopee helped negotiate the grand bargain with people from the state’s business community and progressive activists.

   " There was give and take to the point where people on either side came as far as they were going to, and at that point legislators took over and fashioned what we thought was a reasonable and balanced compromise," explained Wagner.

    Republican Gov. Charlie Baker signed the grand bargain legislation in June.   State Senator Don Humason of Westfield, a fellow Republican, had philosophical objections.

  " I think the market should set wages and benefits," said Humason. " We are in the best economy in years and we see companies raising people salaries and benefits going up to attract workers. It does not need to be done by government."

    The grand bargain also established a permanent sales tax holiday in Massachusetts -- one weekend every August where the 6.25 percent sales tax on most purchases won’t be collected.  Whether to grant consumers the temporary tax reprieve had been a year-to-year decision on Beacon Hill.

    After years of wrangling over regulating the short-term room rental industry, a bill passed just last month to impose the state’s tax on hotel and motel rooms to rentals made using websites such as Airbnb. Cities and towns can charge local taxes and fees.  There are also new registration and insurance requirements for people who rent out rooms in their homes on more than 14 days a year.

     A new $2 fee has been added to the bill for renting a car in Massachusetts.  It goes to a fund to pay for police training.

     Finally, the Massachusetts income tax rate has dropped to 5.05 percent from 5.10 percent.  This happened because the Massachusetts Department of Revenue calculated that certain metrics specified in a law passed in 2002 had been met.

    The last time all the revenue requirements aligned to trigger the income tax rate reduction schedule was in 2016.     

     Happy new year.

  

The record-setting tenure of Springfield Mayor Domenic Sarno. The 2011 tornado and its recovery that remade the largest city in Western Massachusetts. The fallout from the deadly COVID outbreak at the Holyoke Soldiers Home. Those are just a few of the thousands and thousands of stories WAMC’s Pioneer Valley Bureau Chief Paul Tuthill has covered for WAMC in his nearly 17 years with the station.
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