Join us for our installment of the Pacesetters Doing Business series featuring Point32Health on August 29, 2024.
08/29/2024
3:00pm - 4:00pm
Virtual
Join us to hear from remarkable Latinas who have overcome unique hurdles to achieve success in their careers.
09/11/2024
4:00pm - 5:30pm
PwC
The Fierce Urgency of Now Festival brings Boston’s diverse young professionals together with business leaders, organizations, and their peers to build connection, advance careers and ignite positive change.
09/14/2024 -
09/17/2024
Suffolk University
Go deeper than basic DEI training to achieve higher productivity, satisfaction, and revenue growth with our new corporate workshop.
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Our Boston’s Future Leaders (BFL) program provides emerging leaders with a socially conscious and civically engaged leadership toolkit, as well as the opportunity to apply their knowledge through experiential assignments.
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For 30 years, the Chamber’s Women’s Network has connected female professionals of all background and career levels. Today, our Women’s Network is the largest in New England, strengthening the professional networks of women each year.
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Chamber Testifies in Support of Single Sales Factor for Corporate Tax Apportionment
The Greater Boston Chamber of Commerce submitted testimony in support of S.1936, An Act relative to single sales factor, offered by Senator Moore. The proposed legislation would put Massachusetts on par with the majority of states and remove a disincentive for business investment in the state.
This bill gives multi-state businesses the option to shift to a to a single sales factor for their corporate tax apportionment formula. Currently, Massachusetts requires multi-state businesses (other than manufacturing, defense, and mutual fund companies) to determine their tax liability based on a three-factor apportionment, weighing the in-state sales, property, and payroll as a percentage of nationwide sales, property, and payroll. The sales factor is double weighted in Massachusetts. Under SSF, the sales factor is the only factor and there are no payroll or property components in the apportionment formula.
The single sales approach is increasingly popular, with more than half of all states using single sales. As of January 2022, 29 of 44 states with a corporate income tax either use single sales or are in the process of shifting to a single sales formula, including six added since 2018.[1] Although Massachusetts was among the first states to adopt the single sales factor for specific industries, it now lags other states in adopting it across industries. Competitor states like California, New York, and New Jersey all use a single sales formula, as well as Connecticut and Rhode Island.
As more states adopt the single sales approach, Massachusetts employers are at a competitive disadvantage. The three-factor formula, even with double-weighted sales, penalizes companies for investing in the region through property and people. For example, if there are two companies with the same amount of sales but one has thousands of employees in Massachusetts and the other has none, the company with thousands of employees must allocate a greater amount of income to Massachusetts for tax purposes. Businesses with global or national headquarters in the state are most severely penalized. By using a single sales formula, the Legislature will remove the penalty for investing resources into property and payroll in the state.
We urge the Committee to advance S.1936 to modernize our tax code and remove a disincentive for businesses to invest and grow their operations in Massachusetts.
[1] Federation of Tax Administrators, State Apportionment of Corporate Income, January 2021 https://www.taxadmin.org/assets/docs/Research/Rates/apport.pdf
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