Massachusettes Senate President outlines economic proposals

Published on Friday, March 12, 2010

ASSOCIATED INDUSTRIES OF MASSACHUSETTS

Massachusetts Senate President Therese Murray this morning outlined a broad economic growth agenda that includes tax initiatives, streamlining the delivery of economic development services to business, freezing unemployment insurance rates and controlling the cost of health insurance.

Speaking to more than 200 business leaders at the AIM Executive Forum in Waltham, Murray said the commonwealth must find ways to address the job churn that has hindered economic growth since 2000.

"We have to start not just creating jobs, but retaining jobs once we've created them ... From 1990 to 2007, the Commonwealth churned 674,000 jobs a year ... We grow them, and then we lose them," Murray said.

The tax measures set to be debated by the Senate, according to Murray, are "relatively low cost" policies:

• Extending the net operating loss carry-forward period from five to 20 years, starting with losses incurred in tax year 2010. The change would bring the state into line with 25 other states and aid cyclical industries and start-up companies.
• Offering a tax credit for new-business formation in the amount of the corporate minimum ($456). The credit could be claimed for the first three years of the corporation's existence - regardless of whether the corporation pays the minimum excise.
• Applying a special 3 percent capital gains tax rate to investments made by individual investors in Massachusetts-based start-up companies, and held for more than three years. The Boston Chamber also called for this proposal.
• Exempting business-to-business downloads of software from the sales tax. Murray said such transactions appear to be the only business input in Massachusetts not exempt from the sales tax.

Murray said the Senate will consider "variations" on Gov. Deval Patrick's proposed $2,500 credit against withholding for each new job a business creates between now and April 1, 2011 and retains for one year. The Senate is considering a ceiling on the salaries that would be compensated by the credit "to promote the creation of lower-paid jobs."

Massachusetts has lost a total of nearly 250,000 jobs since 2003 while the national economy added jobs. "This has to change, especially as we continue to push our way out of this recession," Murray said.