No Tiny State Tax Cut For Mass. Residents In 2018

Dec 28, 2017

For the second straight year, the Massachusetts income tax rate will not automatically drop in 2018.

By law, the Massachusetts income tax rate drops .05 percentage points every year, if the state meets a target for tax revenue growth.

The gradual, triggered decrease was a compromise worked out after voters passed a ballot question in 2000, calling for the rate to be reduced to 5 percent.

Karen Spilka, who chairs the state Senate's Ways and Means Committee, said that when the tax rate falls, it's a double-edged sword: it's a little good news for taxpayers, and a budget blow for the state.

"I don't think on a yearly basis most folks know that they're getting about $75 back in their pockets when it goes down, but it's like $85 to $100 million for the state," Spilka said.

The state missed its revenue growth target, so there will be no tiny tax break for Massachusetts residents. The personal income tax rate will stay at 5.1 percent in 2018.

The tax cut has been triggered four times in the past decade, most recently for 2016.