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State-Level Tax Relief Could Affect Town Revenues

by Connie Sartini
Town Manager Mark Haddad advised the Select Board at their virtual meeting on Monday night that the Town has received a new directive from Governor Charlie Baker and other top officials stating that local businesses will receive tax relief in the form of a deferral from meals taxes, sales taxes and occupancy taxes. Haddad stressed to the Board that “this will affect our revenues.” He added that funds from these areas were usually sent back to towns with a September payment reflecting the taxes collected from June, July and August. He added that this is of some concern to the town financials with an impact next May.
     Town Accountant Patricia Dufresne and Town Treasurer both said that they do not know whether this action is a “tax deferral or that no payment would be required.”
Details of the proposal are contained in the following press release from the Governor’s office.
     Governor Charlie Baker, Lt. Governor Karyn Polito, Senate President Karen Spilka and House Speaker Robert DeLeo today announced an extension of administrative tax relief measures for local businesses that have been impacted by the ongoing COVID-19 outbreak, especially in the restaurant and hospitality sectors.
     This includes the extension of the deferral of regular sales tax, meals tax, and room occupancy
taxes for small businesses due from March 2020 through April 2021, so that they will instead be due in May 2021.                      Businesses that collected less than $150,000 in regular sales plus meals taxes in the twelve-month period ending February 29, 2020 will be eligible for relief for sales and meals taxes, and businesses that collected less than $150,000 in room occupancy taxes in the twelve-month period ending February 29, 2020 will be eligible for relief with respect to room occupancy taxes. For these small businesses, no penalties or interest will accrue during this extension period.
      “Our Administration is committed to supporting local businesses and Main Street economies recovering from the impact of COVID-19, and we’re glad to work with our legislative colleagues on this additional measure to provide administrative tax relief,” said Governor Charlie Baker. “Extending the tax relief measures we put into place earlier this year will help support companies across Massachusetts including small businesses in the restaurant and hospitality industries.”
     “Providing this tax relief is an important step to support local businesses throughout Massachusetts and we are glad to work with our legislative colleagues on this important issue,” said Lt. Governor Karyn Polito. “This extension allows certain local companies to defer remitting regular sales tax, meals tax, and room occupancy taxes, an important tax relief
measure for businesses that have been affected by the COVID-19 pandemic.”
     For businesses with meals tax and room occupancy tax obligations that do not otherwise qualify for this relief, late-file and late-pay penalties will be waived during this period.
     “The Senate is committed to further assisting our restaurant and hospitality industries hit hard by COVID-19,” said Senate President Karen E. Spilka. “As we continue to safely reopen and recover, we will work with our partners in the Administration and the House to mitigate the economic distress felt by local businesses brought on by the unprecedented public health crisis.”
     “As the COVID-19 outbreak continues to affect our economy, the House is proud of its ongoing efforts to reinforce restaurants, such as its passage of a restaurant recovery package thanks to the work of Chair Michlewitz and the membership,” said House Speaker Robert A. DeLeo. “We support the deferral of tax collections as it will provide a clear business pathway, especially to our restaurant and hospitality industries.”
     The Department of Revenue will issue emergency regulations and a Technical Information Release.
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