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Senate OKs cigarette tax hike, closes corporate loopholes
South Coast Today ^ | May 7, 2008 | David Kibbe

Posted on 05/07/2008 10:04:33 AM PDT by Disturbin

BOSTON —— The Massachusetts Senate voted overwhelmingly Tuesday night to raise the cigarette tax by $1 a pack and close hundreds of millions of dollars in so-called corporate tax loopholes.

The House passed a similar tax package last month. Gov. Deval Patrick generally supports an increase in the cigarette tax, but the $1 boost will be tied up in negotiations over corporate tax rates before it reaches his desk.

The Senate tax package, which passed 31 to 6, would raise nearly $472 million in revenue next year. The House passed a tax package last month that would bring in $80 million less than the Senate.

The differences likely will have to be worked out by a conference committee before a bill can be sent to the governor.

Massachusetts smokers already pay a $1.51 excise tax on a pack of cigarettes. The average price of a pack of cigarettes is $5.41, including the state tax, according to Tobacco Free Mass. The cigarette tax was last raised in 2002, when the Legislature nearly doubled it.

Unlike the House, where a number of legislators said smokers were being unfairly targeted, there was little debate on the cigarette tax in the Senate.

"The Senate's proposal is a reasonable representation of everyone's interests that provides predictability and fairness," Senate President Therese Murray, D-Plymouth, said in a statement after the vote. "It's a bill that is sensitive to the needs of the business community to help them maintain their competitive edge while also generating appropriate and much-needed revenue for state services."

Republicans charged that the Senate's corporate tax changes, a mix of rate cuts and loophole closings that would raise $297 million, would cost jobs in Massachusetts.

"Companies are finding it more and more difficult to expand and relocate to Massachusetts, and they are doing it in other states," said Sen. Richard Tisei, R-Wakefield, the chamber's Republican leader. "How will it lead to job creation in Massachusetts?"

Sen. Marc R. Pacheco, D-Taunton, who voted for the tax package with the rest of the SouthCoast delegation, rejected Republican arguments that the tax hikes were not needed. He blamed former Gov. Mitt Romney's administration for leaving the Patrick administration with a "structural deficit," on top of unmet needs in transportation, education and human services.

The Legislature is grappling with ways to close a $1.3 billion gap between projected revenue and the cost to maintain current services.

Sen. Pacheco said this week's news that April tax collections were $400 million higher than the same month last year did not mean the state was out of its fiscal hole. Patrick administration officials said the money appeared to be a temporary bump that did not fully reflect the economic downturn for the 2009 fiscal year to begin July 1.

"One month does not tell what the economic situation is going to be in the tax revenue for the year," Sen. Pacheco said. "You can't just add up the revenue piece. You have to add up the expense side and what we are not paying for."

The Senate and House bills both adopt two major loophole closings that the governor has sought.

One, called "combined reporting," would bar multi-state companies from shifting profits to headquarters in other states to avoid paying Massachusetts taxes. Another, called "check the box," would prevent companies from claiming a different tax status on federal and state tax returns.

Massachusetts would become the last state in the nation to adopt "check the box" and the 23rd to have combined reporting.

The Senate would also cut the corporate tax rate from 9.5 percent to 8 percent over three years, beginning in 2010. The House bill would cut the rate to 7.5 percent over three years, beginning next year.

The Senate defeated a proposal for a 5 percent tax on alcoholic beverages to raise $87 million for drug abuse treatment.

Senators filed amendments for other tax increases, including local option meals taxes, an end to the tax exemption on utility poles, and the expansion of the state's hotel room occupancy tax to vacation home and condominium rentals.

In the end, those amendments were dropped when it became clear they would not pass. Instead, the Senate approved a study commission on municipal revenue options, with a report due Dec. 1.


TOPICS: Government; News/Current Events; US: Massachusetts
KEYWORDS: cigs; smokes; tax; taxes
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To: Disturbin

why not raise the tax to $10/pack? ItsforthechildrenBushfaultHateAmerica


21 posted on 05/07/2008 10:25:03 AM PDT by Republicus2001
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To: gunservative
Interesting note. The name of the British ship that seized Hancock's ship in Boston Harbor for alleged smuggling: HMS Romney.
22 posted on 05/07/2008 10:25:26 AM PDT by The Pack Knight (Duty, Honor, Country.)
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To: Disturbin

Ok, soon they will reach the point where so many people quit smoking, or buy their cigs on the black market, that they are no longer reaping the windfall taxes(if they can use it for profits I can use it for taxes)from cigs, they will turn to other things. Get ready America, we are about to become the a communist country with taxes on everything. We need to take back our country. Let’s do it. Let’s stand up and say NO MORE TAXES, on anything. Don’t like smokers, to damn bad, live with it or lose what YOU like to taxes.


23 posted on 05/07/2008 10:32:43 AM PDT by calex59
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To: Disturbin; Just another Joe; CSM; lockjaw02; Publius6961; elkfersupper; nopardons; metesky; ...
"The Senate's proposal is a reasonable representation of everyone's interests that provides predictability and fairness,"

Wait a minute, I thought they always claim higher cig taxes cuts into smoking rates, thus they can predict how much "revenue" such an increase will generate....

And what exactly is fair about only taxing a certain minority segment of the population for the benefit of all?

Oh, never mind, this is Massachusetts.........

Nanny State Ping

24 posted on 05/07/2008 10:32:45 AM PDT by Gabz (Don't tell my mom I'm a lobbyist, she thinks I'm a piano player in a whorehouse)
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To: LoneRangerMassachusetts
Maybe you see a big difference between McCain and Obama. I sure don't

I don't either

But, you and I are going to vote for one of them

Not if there is a libertarian or constitutionalist candidate on the ballot.

Can you think of a good reaon to live here in the US

Sure can, because not all of it is nasty crooked little fascist police states like MA, NY, NJ, CT, MD & RI. Would you rather stand in sh!t up to your ankles or in sh!t over your head? You apparently think there isn't any difference.

25 posted on 05/07/2008 10:34:29 AM PDT by from occupied ga (Your most dangerous enemy is your own government,)
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To: gunservative
Where’s John Hancock when you need him?

He was bought out by a Canadian insurance company and his headquarters was sold off to a New York developer.

26 posted on 05/07/2008 10:35:57 AM PDT by andy58-in-nh (Politicians cannot buy votes that are not for sale.)
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To: Disturbin
See article in WSJ today how in NY that the tax is so high that it now is creating a new criminal enterprise of smuggling. Over 45% or so of cigarettes are smuggled in and a crook can make $1,000,000 on one truck load. Also some of the ill gotten gains are going to fund terrorism groups.

There is nothing dumber than a politician!

27 posted on 05/07/2008 10:39:01 AM PDT by stubernx98 (cranky, but reasonable)
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To: stubernx98
There is nothing dumber than a politician!

Now don't you be saying bad things about Sheila Jackson Lee (the one who thinks that NASA landed men on Mars)

28 posted on 05/07/2008 10:50:21 AM PDT by from occupied ga (Your most dangerous enemy is your own government,)
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To: Disturbin
The Senate defeated a proposal for a 5 percent tax on alcoholic beverages to raise $87 million for drug abuse treatment.

Confirming that there are more drunks than smokers in the Mass legislature.

29 posted on 05/07/2008 10:50:41 AM PDT by Madame Dufarge
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To: AppyPappy

“A tax on the poor that liberals support.”

We already count on revenue from our state lottery, which is a voluntary tax on the stupid.


30 posted on 05/07/2008 11:08:57 AM PDT by Disturbin (Liberals: buying votes with your tax dollars)
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To: Madame Dufarge
Confirming that there are more drunks than smokers in the Mass legislature.

Line of the thread!!!!

31 posted on 05/07/2008 11:11:11 AM PDT by Gabz (Don't tell my mom I'm a lobbyist, she thinks I'm a piano player in a whorehouse)
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To: calex59

“... they will turn to other things. Get ready America, we are about to become the a communist country with taxes on everything.”

Like in Jersey where they are pondering a fast food tax?


32 posted on 05/07/2008 11:11:19 AM PDT by Disturbin (Liberals: buying votes with your tax dollars)
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To: vikingd00d
See this article from today's Wall Street Journal: "Cigarette Taxes are Fueling Organized Crime" http://online.wsj.com/article/SB121012081570272357.html?mod=googlenews_wsj
33 posted on 05/07/2008 11:11:48 AM PDT by mak5
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To: stubernx98

Bring on the black market gasoline. We could use it!


34 posted on 05/07/2008 11:14:10 AM PDT by Disturbin (Liberals: buying votes with your tax dollars)
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To: Madame Dufarge; Gabz
"Confirming that there are more drunks than smokers in the Mass legislature."

Line of the thread!!!!


Hear! Hear!
35 posted on 05/07/2008 11:28:14 AM PDT by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: from occupied ga

” I just can’t think of a good reason.’

The Red Sox,the Pats,the Celtics, the Bruins,and Boston College hockey.

Other than that,there is no good reason for living in Maqssachusetts and I live there.


36 posted on 05/07/2008 11:29:35 AM PDT by Mears
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To: The Pack Knight

I can’t blame Mitt for this one the rats have an absolute Majority, over ride at will.


37 posted on 05/07/2008 11:34:53 AM PDT by Little Bill (Welcome to the Newly Socialist State of New Hampshire)
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To: The Pack Knight

I can’t blame Mitt for this one the rats have an absolute Majority, over ride at will.


38 posted on 05/07/2008 11:35:01 AM PDT by Little Bill (Welcome to the Newly Socialist State of New Hampshire)
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To: calex59
become the a communist country with taxes on everything.in California, believe it or not the Governator wants to put a sales tax on human labor...
39 posted on 05/07/2008 11:55:31 AM PDT by Republicus2001
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To: The Pack Knight

No problem. I wish they would raise it to $ 10.00 a pack. I already buy my smokes in New Hampshire for $ 35.00 a carton.


40 posted on 05/07/2008 12:14:40 PM PDT by HenpeckedCon (Deport them all... Let God sort them out!)
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